Trade bodies plea for help for contractors and freelancers

While welcoming the government’s support for workers left unable to work due to the coronavirus outbreak, recruitment trade bodies have raised concerns over the lack of help for contractors and freelancers.

Late last week, Chancellor Rishi Sunak revealed the launch of an HM Revenue & Customs-operated scheme that would pay affected workers 80% of their salary, covering wages of up to £2.5k a month, with gross pay backdated to the start of March and lasting three months. The chancellor added he would extend the scheme if required.

Recruitment & Employment Confederation CEO Neil Carberry called the chancellor’s move the “big action” the REC and many other business organisations had been working hard to achieve all of last week. 

“The key thing now is to make sure the money can flow quickly and simply to the businesses that need it. Cashflow support, VAT deferment and wage payments are the exact radical measures that will help. The most important thing now is to implement these changes with great speed. Looking ahead, recruitment professionals have a pivotal role to play in helping people get jobs in sectors where they are most needed at this time such as healthcare, logistics and the food sector.”

Meanwhile APSCo CEO Ann Swain said the crucial element of the chancellor’s pledge lies in how quickly this can be accessed. 

“Recruitment is already seeing an impact – in a survey of our members we discovered that two-thirds (67%) of recruitment firms have already had permanent hiring within their sector put on hold. While 83% of recruitment firms were considering redundancy for their own staff, three-quarters (76%) said that help with salaries was the most important measure that the government could implement.
 
“The clarity and simplicity of the rescue package whether that be loans, tax payment deferral or salary grants will be critical during this difficult period and I will be speaking to the prime minister’s business adviser to share my concerns. It is also likely that HMRC and other financial services organisations will have a critical need for staff to process applications and APSCo members have ideal candidates ready and waiting.
 
“The VAT deferment will help cashflow, one of the key issues for recruitment firms, and the fact that the Business Interruption Fund will be interest free for 12 months and available from today will also be good news for our members.  

“However, we are also concerned about the thousands of self-employed and freelance contractors who have had their assignments terminated and who will not be protected and who, it seems, will have to rely on the benefits system.”

Andy Chamberlain, director of policy at IPSE (the Association of Independent Professionals and the Self-Employed), echoed those sentiments, accusing government of leaving the self-employed trailing far behind.

“The government has done nowhere near enough to support the self-employed. In fact, instead of supporting freelancers to help them keep their businesses going, it is pushing the self-employed into the benefits system. Worse, in the benefits system, the amount of money available will simply not be enough to cover many freelancers’ costs.

“In this drastic and grave situation, we urge the prime minister and chancellor to match the steps they have taken for employees and create a Temporary Income Protection Fund for the self-employed. This should give a temporary, targeted cash injection to the freelance businesses that are struggling most – a financial boost to make up for lost income and keep them afloat.

“We urge the government to act on this and we urge anyone affected to sign our petition to make this happen.”

But FCSA CEO Julia Kermode welcomed the chancellor’s move, which her organisation believes will also include the contractors that are engaged via compliant umbrellas who genuinely employ them.  

“This means that over 625,000 professional contractors employed by umbrellas will benefit, and of particular importance are those working within the health and care sectors. However, we are very concerned to ensure that the payments will include employers’ NICs in addition to the wages, because businesses in financial distress will not be able to fund the employers NICs, meaning that workers will receive less than the 80% income promised. As soon as the announcement was made on Friday evening, we urgently requested clarity from the government and we await their response. 

Dave Chaplin, CEO and founder of contracting authority ContractorCalculator, called on the chancellor to support freelancers and contractors as the coronavirus pandemic will hit them hard.

“We are living and working in unchartered waters and whilst the chancellor has pledged to support businesses and employees through this Covid-19 crisis, he is forgetting the millions of freelancers and contractors who have also had their lives turned upside down overnight. Once again, the flexible workforce, who the government purports to support, is being penalised. Mr Sunak now needs to recognise the impact Covid-19 is having on the freelance workforce and step in to reassure them that they will get proper financial support to see them through this unprecedented turmoil, helping them to swim through the tide and not sink without trace.”

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