HMRC issues delayed payment warning for SEISS – ‘significant proportion’ face no support | Personal Finance | Finance
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SEISS grants have kept millions of self-employed workers afloat during the pandemic but the claiming system is not free of complications or difficulties. Today, HMRC reminded freelancers of the importance of following the correct procedures.
The Association of Independent Professionals and the Self-Employed (IPSE) published research into the long-term impact of the pandemic on the £300billion freelance sector.
The research showed more than two out of five freelancers (42 percent) lost over 40 percent of their turnover.
It also found that, overall, two out of three freelance businesses (67 percent) were negatively affected by the pandemic, which translated into a drop in turnover for 60 percent of all freelancers.
Almost one in ten freelancers (nine percent) saw a “devastating drop” in turnover of over 90 percent.
The financial damage of the pandemic varied significantly by gender, age and business structure. Three out of five sole traders (62 percent) saw a drop in turnover compared to 55 percent of limited company directors.
However, for those limited company directors who did see a drop in turnover, the damage seems to have been greater: 56 percent saw a drop in turnover of over 40 percent, compared to 46 percent of sole traders.
Almost two-thirds (62 percent) of freelancers aged over 35 saw a decrease in turnover, compared to half of under-35-year-olds. Over two out of five male freelancers (43 percent) also said their turnover decreased a lot compared to 36 percent of female freelancers.
IPSE said Government support – and the “gaps” within the support – seemed to have been a factor in the spread of financial damage.
Although SEISS offered support to 3.4 million self-employed people, it excluded up to 1.6 million of the five million people who were freelance at the start of the pandemic.
This has led to 52 percent of freelancers saying they do not feel supported by the Government. This rose to more than two out of three (67 percent) among limited company directors, who were excluded from SEISS.
These difficulties may also impact the future of self-employment itself, with 25 percent of freelancers considering leaving self-employment.
Andy Chamberlain, a Director of Policy at IPSE, commented: “This research shows the true, long-term financial impact of the pandemic on the self-employed sector, which contributed over £300billion a year to the economy before the pandemic.
“Not only did two out of three freelancers see a drop in turnover: two out of five saw a drastic 40 percent-plus drop. One in ten even saw their turnover slashed by over 90 percent. These are huge setbacks for a freelance business: setbacks that many will not recover from for years to come.
“The damage of the pandemic was refracted through the Government support on offer – or rather, the lack of support for a significant proportion of the sector. This is reflected now in the many freelancers who now simply do not feel the Government supports them or their way of working: particularly limited company directors.
“Limited company directors feel persecuted by the Government right now not only because they were completely excluded from the SEISS grants, but also because of the changes to IR35 taxation the Government forced through earlier this year.
“To make freelancing appealing and to get this vital sector back on its feet again, our message to the Government is this: repair your relationship with self-employment, clear up the mess after IR35, and build a stimulus package to support and kickstart the worst-hit parts of the sector.”
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