While self-employed professionals in the jewellery trade welcome the government’s recently announced rescue package, which secures 80% of average monthly profits for self-employed workers, there are many question marks for those in this position.
Professionals up and down the country have noticed significant gaps in the scheme, from the exclusion of those who have become self-employed since the end of the 2018-19 tax year, to the package not coming into effect until June and those earning over a certain amount receiving no help at all.
Steve Todd, founder and owner of SA agencies, shares his thoughts with Professional Jeweller.
He tells our editor: “The government’s challenge is gargantuan, and I must say first of all that they have really gone beyond what anyone could have reasonably expected to support the vast majority of people in this situation. However, whilst on paper it may look like the self employed now have the same entitlement as the employed, there are still some serious concerns which affect me and/or many of my friends and colleagues in self-employment.
“If we qualify for this payment we have to wait until June to see any money. Remember that the self-employed have their living costs, but additionally they have business costs (car lease, insurance, accountant etc). They have to fund their pension, national insurance, and don’t receive holiday and sick pay. They have no redundancy pay if they can’t return to work. Many self-employed will have set themselves up a financial buffer in case of slower periods of work – these savings can count against you because they can stop you getting Universal Credits to help tide you over. They’ve also not allowed the self-employed with a profit of over £50k to receive any payments. The interest free business loans are not accessible to many travelling self-employed agents as we do not have business premises. Finally they’ve allowed us to defer tax payments which helps in the short term – but it is deferred, not cancelled, and will only give you a massive bill in the future.”
He adds: “The self-employed will take longer to recover from this situation. And I am very worried that many self-employed will lose their jobs as a result and have to start from scratch.”
In addition to the concerns raised by Todd, it appears the package excludes small limited companies.
Directors of these small limited companies who pay themselves a low salary and top up their income with dividends will not technically qualify as self-employed, and therefore unlikely to receive a payment from the Coronavirus Job Retention Scheme.
According to the Treasury, these companies are ineligible because it is impossible to know whether the dividends arise from their work or from investments. As such, the government is reluctant to subsidise those with extensive earnings.
Ian McWilliams, agreeing with Todd that the government is doing a lot to support workers, is concerned he will not be entitled to help due to running his business as a limited company.
The sales agent shares: “Firstly I’d like to say the Government has done and is doing an absolutely amazing job in these unprecedented times in trying to protect both employed and self-employed workers. The work required is being undertaken at breakneck speed albeit for most the help couldn’t come soon enough of course. Also of course the help for the self-employed will not be able to be administered until June which of course may bring its own problems.
“From a personal point of view as I run my business as a Limited company (Lone Wolf Sales Ltd), it appears that I will not be covered under the scheme. This is certainly a momentous, difficult and financially uncertain time for all – let’s hope the plans put in place will go a long way to alleviate the situation and that we can all come through this as well prepared as possible.”