U.K. Chancellor Announces Emergency Measures for Freelancers

U.K. Chancellor of the Exchequer Rishi Sunak

The U.K. has finally announced an economic relief package for freelancers not in employment after much of the country’s creative industries shuttered due to the coronavirus pandemic.

Chancellor of the Exchequer Rishi Sunak announced a new self-employed income support scheme on Thursday. Self-employed individuals can claim 80% of their average income over the last three years up to £2,500 ($3,000) a month.

To be eligible, individuals must earn more than 50% of their income from being self-employed, have trading profits of less than £50,000 ($61,000), and have a self assessment tax return for 2019. The taxable scheme will begin from June and payments will be backdated to March 1 with applicants being paid for three months in one go. The scheme will last for at least three months, with an option of extension.

Those with an immediate need for finances can access Universal Credit or a business interruption loan. A self-employed person with a non-working partner and two children living in the social rented sector can receive welfare support of up to £1,800 ($2184) a month.

Sunak said that the scheme will cover 95% of the self-employed. The remaining 5% have average incomes of £200,000 ($243,000), Sunak said. The scheme does not cover those who have been self-employed for less than a year.

“We will not be able to protect every single job, or save every single business,” Sunak said. “But I am confident that the measures we have put in place will support millions of families, businesses and self-employed people to get through this, get through it together, and emerge on the other side, both stronger and more united.”

The measures come a nearly a week after a package was announced for payroll workers. They guaranteed 80% of their salaries up to $2,930 per month, with no upper limit set on the funds, a far cry from the maximum $578 per month available under the Universal Credit scheme for the self-employed.

The only concessions that the self-employed were given were access to an amount equalling that of payroll employees’ statutory sick pay, as well as a tax deferment.

Given that some 50% of creative industry workers are freelance, the government faced heavy criticism in recent days for not looking after their welfare, starting with industry union Bectu.

People writing to the government to demand a package for the self-employed included the heads of U.K. terrestrial broadcasters BBC, ITV and Channel 4, and the U.K. chief of ViacomCBS that owns Channel 5; a group of eminent economists from around the world; a U.K. department for digital, culture, media and sport committee; and a collective of leading musicians including Alison Balsom, Nicola Benedetti, Sarah Connolly and Sheku Kanneh-Mason.

On Wednesday, Prime Minister Boris Johnson had said that it was proving difficult to find a way to compensate freelancers who are not a pay as you earn scheme, and on Tuesday, Sunak said that it was an “incredibly complicated” process.