Thousands of self-employed will ‘slip through the net’

Hundreds of thousands of self-employed people in the UK will “slip through the net” of government schemes, according to Hargreaves Lansdown.

There were 151,000 people in the UK who started working for themselves between April and December 2019, new data from the Office for National Statistics (ONS) has revealed, meaning they will not qualify for a grant from the Government’s Self-Employment Income Support Scheme.

Hargreaves Lansdown suggested there are likely to be “thousands more” who started self-employment in 2020 who aren’t covered by these statistics but also missed out.

The ONS released the figures on self-employment to explore the likely impact of the coronavirus pandemic on different groups.
 
The data revealed that another 9% started self-employment between April 2018 and March 2019 – representing 431,000 people – who won’t have a full year of earnings on their tax return, which Hargreaves Lansdown also highlighted could mean that their grant may not reflect their current earning potential.
 
Anyone with profits of over £50,000, or for whom self-employment makes up less than half their income, will also fail to qualify.

Hargreaves Lansdown personal finance analyst, Sarah Coles, commented: “Over 150,000 freelancers started working for themselves too late in 2019 to get any help from government coronavirus schemes – but the number of self-employed people left out in the cold could be closer to one million.

“450,000 people were in their first year of business in 2018/19 so their payment may be based on lower profits, and over 700,000 run their own limited company, so won’t qualify. Then there are those who make over £50,000 or who earn less than half their income from self-employment who are excluded from the scheme altogether.

“This scheme is far more generous and wide-ranging than anyone ever expected, but as Rishi Sunak himself has already admitted – it won’t cover everyone. Hundreds of thousands of people will slip through the net, and will need to fall back on alternative schemes, savings or benefits to get them through the crisis.”

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