Income support scheme for self-employed workers: 'welcome ... but much more detail needed'

28 March 2020

On 26 March, the Chancellor of the Exchequer Rishi Sunak, revealed a package of financial support for self-employed workers.

The announcement is welcome and we expect it to help many authors and other freelancers, if administered correctly. The SoA has been working hard with the Creative Industries Federation and others to push for a proper package of financial support for freelance creatives, who make up 33% of workers in the creative industries – more than double the 15% of self-employed people in the economy as a whole.

We are pleased that the Government has listened to us, but much more detail is now needed so that we can better understand how the scheme will be administered and how our members stand to be affected. As everyone adapts to the current crisis, certainty is at a premium and the Government needs to act fast to address problems with the scheme that have already become apparent.

In particular, self-employed workers are being asked to wait until June to be contacted by HMRC, who will identify from past records whether they are eligible. While some will be able to see immediately that they are eligible for support based on the criteria set out, many will not have that certainty, particularly those who are new to self-employment and those with ‘lumpy’ incomes such as authors.

Given that no payments will be made until June, many workers need to know now what interim support, if any, is available to them beyond Universal Credit and other benefit payments. It is simply not clear what the scheme proposed means for authors with portfolio careers who earn a portion of their income from self-employment and the rest through PAYE and how the schemes for self-employed and employed people interrelate.

We are taking part in a conference call on Monday afternoon with Business Minister Paul Scully MP to discuss measures to help self-employed workers during the COVID-19 outbreak. We will be asking for clarity on these and other points in that meeting.

In the meantime, we continue to receive and process the many applications to the Authors’ Emergency Fund that we have been receiving since it launched on 20 March.

Am I eligible and how much will I receive?

If you:

  • were self-employed in the last financial year
  • have not had a trading profit of more than £50,000 during the last three financial years
  • have suffered a loss in income following the crisis

‚Äč...then based on what we know you should be eligible for a Coronavirus Self-employment Income Support Scheme lump-sum will be paid to you of up to £2,500 per month in June covering a three-month period.

The amount you receive will be equivalent to 80% of your average profits during the last three years or, if newer to self-employment, for as long as your tax records show and will be capped at £2,500 per month.

You do not need to do anything to apply for the scheme. HMRC will contact you. Lump sums paid under the scheme will, however, be taxed.