An amendment to the Coronavirus bill has outlined a potential way forward in providing financial support to self-employed workers and freelancers.
The draft bill, which is available through Parliament’s publications library, includes an amendment which suggests the introduction ‘Statutory Self Employment Pay’.
Speaking in the House of Commons today (Tuesday), Chancellor Rishi Sunak said he will be making further announcements on the matter in the coming days.
He told the House that it’s something that “we’ve been looking at in intense detail over the past week”.
“There are genuine practical and principled reasons why it is incredibly complicated to design an analagous scheme to the one that we have for employed workers,” Mr Sunak said.
“[Self-employed workers] can absolutely rest assured that we absolutely understand the situation that many self-employed people face at the moment…and we are determined to find a way to support them.”
So far, the government has announced that it will cover 80% of workers’ wages for the duration of the Coronavirus outbreak, and has introduced more than £330 billion worth of loans and grants for small businesses. Yet, freelancers and self-employed has been somewhat left in the lurch, with only access to Statutory Sick Pay worth £95 a week.
If the amendment is successful, Statutory Self Employment Pay would receive an average of their monthly income over the past three years up to £2,917.
In the amendment’s explanatory notes, supporting MPs explained: “The purpose of this amendment is to make the government ‘top-up’ self employed workers’ earnings to the lower of 80% of their net monthly earnings averaged over three years, or £2,917 a month.”
There is no certainty as to whether or not the government will support this measure, but it at least gives self-employed workers and freelancers some idea of what support might be coming their way.
Proof of concept
Over the weekend, a group of entrepreneurs in the fintech space worked together on a potential solution to the ‘operational difficulty’ of proving self-employed workers’ loss of earnings.
Covid Credit is a platform that allows a sole trader to self-certify that they have lost income and prove their previous 12 months of income by connecting to their bank account.
This is possible due to the unique capabilities in the UK banking system called “open banking”. Recent transaction history provides proof that income has been affected recently and by the crisis.
The group said: “Whilst the proof of concept is not publicly available, it works, and by creating something that works the hope is to demonstrate that this service could help the 5 million self employed through the COVID-19 crisis.
“We urge the UK Government to collaborate with us, the Fintech community, to help solve the rapidly evolving problem facing the UK self employed community.”
It added: “We are here and we are able. This service is ready to go live, but we are waiting on input and support from the UK Government before we do so. Sole traders could use Covid Credit’s proof of concept to generate a self-certification of income loss to send to HMRC.”
The group working on the platform was led by Fronted, 11:FS, Credit Kudos, Mazuma and SeedLegals