Lack of Government support leaves self-employed worker struggling to pay bills

Sara Giles, who runs Newport Pet Services, is angry that she won’t be entitled to the support announced by the Government because she only recently set up her business.

If they have suffered a loss in income, a taxable grant will be paid to the self-employed, worth 80 per cent of their profits up to a cap of £2,500 per month. But those who are recently self-employed, such as Sara, will not receive any help under this scheme because they will not have filed a tax return and therefore HM Revenue and Customs will not know of their self-employed status.

Sara now believes the only financial help she would benefit from is if she caught the virus herself because it means she would become protected under her income protection policy. “I’m devastated as I’m not eligible for anything,” she said. “I feel like I have been shafted.

“I have had a job since I was 13, got a degree and worked nine years as a civilian for the police. I have always paid National Insurance and tax, but because I only set up my one business in November 2018 I get nothing. They are not going to take my finances in the last 12 months into account.

“I have no savings and no current income. Of course I don’t want the virus but financially I would be better off because if I caught it I would be protected under my income protection policy.”

Sara said the outbreak and the lockdown has forced her to close her business, which offers a pet-sitting and dog walking service. “I lost about £800 in four days from the pet sitting because more people were working from home and cancelling their holidays. I have spent along time building the reputation of the business. I don’t know what I am going to do,” she added.

Meanwhile, Gail Perry, of Perry Business Support, said she was also disappointed to learn that anyone who set their business up in the last 12 months categorically do not fall into the 95 per cent of self employed that are eligible for the grant.

“I could quite easily provide details of my accounts for the first six months of my business so I do not accept his reasoning that it would be impossible to qualify anyone who hasn’t submitted a tax return with a year of accounts.

“As a virtual assistant I accept that I work from home to support businesses so lockdown does not affect my actual place of work, however if businesses have had to close, significantly reduce their operation or are unable to trade then they have no need for the support that I provide.

“This ultimately means that I am unable to earn a living for the foreseeable future.”

John Merry, head of employment at Lanyon Bowdler Solicitors, said: “I know that many people who are self-employed have been extremely worried about how they will cope. The Chancellor has said that he expects that 95 per cent of people who earn the majority of their income from self-employment will be covered by the support measure.

“The Government’s offer is to pay a taxable grant to the value of 80 per cent of average profits over the last two years, up to £2,500 a month – initially for up to three months.

“The grants are to be available to anybody who receives the majority of their income from self-employment, and who has with trading profits of up to £50,000. HMRC is to contact directly those who are eligible to apply.

“It will be necessary to have filed a 2019 tax return – but those who missed the January 31 2020 filing deadline are to be given another four weeks to comply.

“The Government recently announced support for employees of up to 80 per cent of pay, capped at the same £2,500 per month – but this applies only to those who are ‘furloughed’ – which means temporarily not working. In contrast, the Chancellor has said that self-employed people can claim their grant whilst still trading.

“A down side is the issue of delay. The Chancellor indicated that he does not expect the scheme to be operating before early June.”