Meet the freelancers who fall through the gaps in Rishi Sunak’s financial safety net

It was the day self-employed people had been waiting for: 26 March. They held their collective breath in anticipation for the announcement that they, too, would be rescued by the government during lockdown; like a great big benevolent hand from on high, swooping down to catch them as they hurtled towards financial ruin.

“I’m proud of what we’ve done so far, but I know that many self-employed people are deeply anxious about the support available for them,” said Chancellor of the Exchequer Rishi Sunak, with all due seriousness. “Musicians and sound engineers; plumbers and electricians; taxi drivers and driving instructors; hairdressers and childminders and many others, through no fault of their own, risk losing their livelihoods.

“To you, I say this: You have not been forgotten. We will not leave you behind. We are all in this together.”

Mr Sunak went on to announce measures that would ensure, in his estimation, 95 per cent of all people “who are majority self-employed” would be lovingly cared for by the state. But what of the forgotten five per cent? And what of those who didn’t meet the “majority” self-employed income threshold? For many, the moment they had longed for was precisely the moment they realised they would receive no help whatsoever.

“I can’t tell you the crushing disappointment I felt when that briefing happened,” says Hazel Plush, 33, a freelance travel writer and editor from Windsor. “It was a rollercoaster of emotions – ‘Yay, they’re announcing a support package! Yay, I might be covered! Wait, what? I get nothing?’”

The irony of Hazel’s situation is that she’s in it because of her aversion to risk. She built up her business as a freelance writer slowly, carefully. For four years she put in the work, adding to her contacts, developing relationships, building a client base. She was still doing contracted PAYE jobs alongside her freelance work to maintain a guaranteed income stream; around 40 per cent of her earnings came from freelance projects. Then, in 2019, she took the plunge.

“I went full-time freelance and made more in that first year than I ever did when I was on staff,” she says. “It was unexpected, but it was because it wasn’t an overnight change – I’d already done the groundwork. After a really successful year, it felt very difficult to have the rug pulled out from under my feet.”

The day Hazel celebrated her one-year anniversary of becoming full-time self-employed was the same day she had her first commission pulled due to the coronavirus outbreak. It was a piece about Italy; a day later, that whole country would go into lockdown. “I thought, OK, this is clearly very serious – but I had no idea of the implications it would have for my business,” she says. One by one, all of her existing travel commissions were cancelled as the possibility of leaving the UK to go on holiday shrank to nothing.

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The reason Hazel doesn’t qualify for financial support is the same reason tens of thousands of others are in her position: she only commenced full-time self-employment during the 2019/20 tax year. It’s just one of three main reasons self-employed workers are finding themselves excluded from the provisions, according to the Chartered Institute of Taxation (CIOT) – the others being that they earn more than £50,000 in profits, or that their self-employment income makes up less than 50 per cent of their total earnings.

According to a report conducted by Citizens Advice, the number of people not covered by the new financial scheme is “sizeable”: it estimates that around 400,000 people fall through the gaps. In March, the number of people seeking self-employment advice from the charity rose by 198 per cent year-on-year. Having identified this at-risk group, Citizens Advice is clear in its recommendation for the government: “The Self-Employed Income Support Scheme should be extended to people who have been self-employed for less than a year.”

Dame Gillian Guy, chief executive of Citizens Advice, said: “The government’s rescue package for self-employed workers is an extraordinary intervention, but hundreds of thousands of people could slip through the coronavirus safety net. This is a particular problem for people who became self-employed recently. With bills to pay, and some facing the prospect of months without any earnings, the situation is getting desperate.”

The only option for those not covered by the measures currently is to apply for Universal Credit – a total of £409.89 a month unless you have a disability, are a carer or have children to provide for. You can’t even apply for this if your partner earns above a certain amount.

Things, too, can quickly get complicated for those who have built portfolio careers (whereby workers have a number of different jobs, some of them contracted, some of them freelance). Journalist Sarah* tells The Independent that Mr Sunak’s rule about the majority of your earnings having to come from self-employed work means she’s entitled to almost nothing.

“I’m on a zero hours-style PAYE contract with one client and, as I earned more through PAYE in the years 2017-2019 than through self-employment, I can’t claim anything for that part of my income – nor can anyone who earns up to 49 per cent of their income through self-employment,” she says. “What is particularly galling is that the furlough I receive for the PAYE part of my income is calculated on my average earnings for the tax year just ended (to April 2020) – a year in which I earned considerably more through self-employment. So the tax years on which they are basing this already unequal system don’t even match up!”

For some, it was a new business venture that was blown out of the water by the timing of the UK’s lockdown. Chefs Will Murray and Jack Croft had always dreamed of opening their own restaurant. And with the financial backing of partner James Robson, it looked like 2020 was finally going to be their year. The trio proudly opened the doors of sustainable dining concept Fallow in London’s upscale Mayfair district on 10 March; traded for exactly eight days; and then were forced to shut up shop.

“It was the best week of our lives when it opened” says Will. “Then bookings dropped 20 per cent; then 50 per cent; then it was all over.” He says the two chefs had tunnel vision: “We were so focused, working 18-hour days to get everything ready for opening – everyone saw it coming but us.”

The hardest part, says Will, was having to tell staff that the jobs they’d just accepted no longer existed. “We have this small, dynamic team that we were training,” he says. “It was really tough to turn around and say to them they were being let go after one week, as well as being unable to offer them much support.”

They’ve tried to find ways to help the team, including using an online platform to do virtual cooking workshops – “our sous chef is doing a gnocchi masterclass for some women in Burnley,” says Will – and launching a crowdfunding campaign with the aim of raising £20,000. But, financially, they’ve been left in a precarious position.

“It’s not easy – we’re all really tight for cash,” says Will. He and Jack both put their life savings into the venture, with Jack even remortgaging his house. Because the business was so new, they’ve been turned down for every loan they’ve applied for; Will doesn’t even qualify for Universal Credit.

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The business also can’t apply for the Job Retention Scheme, where staff are furloughed and receive 80 per cent of their pay from the government, as it didn’t run its first payroll until the end of March. It’s excluded, too, from Mr Sunak’s other coronavirus small business loans – including the “Bounce-back Loans” scheme that launched on 4 May – because these are based on revenue and the amount of time a business has successfully traded.

“It’s not right that we’ve fallen through the gap,” says Will, “but I get it – we’re in a global crisis. I’m hopeful they’ll extend the measures. The government restart loans are good but they need to go a further, maybe with a higher interest rate for businesses that are more of a risk if you started later and don’t have a strong proof of concept.

“I think we have a legitimate case to say that, as it was the government that decided to close all businesses down, they have a duty to provide for us as well.”

“The current situation is something none of us could have prepared for – including the government,” agrees Jennifer Hodgson, a PR consultant who went freelance just before lockdown. “But there should be relief and support made available for all who need it. Nobody should be left behind.”

While all of those people excluded from the provisions who The Independent speaks to are more than reasonable, acknowledging the unprecedented situation the pandemic has placed us in, there is a kind of resigned anger there behind the patient, measured responses. It is a desire to be acknowledged, as much as anything; a wish for the government to stand up and admit that the words, “You have not been forgotten. We will not leave you behind” do not, in reality, apply to everyone.

Cathy Wassell, 50, a digital marketing consultant who runs a subscription box service for anxious teenagers on the side, feels let down. “I am angry at the government about many things – lies, absence of PPE, awarding of contracts to Conservative Party donors rather than existing British manufacturers to name but a few. I think that in general the financial packages are fair, but limited company entrepreneurs have fallen right through the net.

“The government has failed to help a significant proportion of the self-employed, many of whom are now going to struggle to pay their bills and even to feed their families.”

As for Hazel, she’s luckier than most, having already built up a financial cushion before committing to the freelance life and managing to pivot and secure some other, non-travel-related commissions. But her final words echo hundreds of thousands of self-employed people across the UK: “Do I feel angry at the government? I personally don’t know how to feel anymore. It’s been a rollercoaster. I’ve been through all the emotions there are – apart from the good ones.”

The government’s Department for Business, Energy & Industrial Strategy has not responsed to The Independent’s request for comment.

*Names have been changed