Self-employed warned of ‘severe hardship’ after Rishi Sunak’s Budget blunder

Rishi Sunak defends decision on 1% pay rise for NHS staff

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Chancellor Rishi Sunak left many self-employed people relieved when SEISS was made accessible to those who filed a tax return in the 2019/2020 tax year. Before this change, only those who had filed a tax return in 2018/2019 were eligible. The new policy allowed an additional 600,000 people to claim the SEISS, but Mr Sunak remains under pressure as many are still unable to get support. Over one million people remain ineligible for the scheme, and critics have warned the Chancellor may have condemned many self-employed people to hardship.

Mike Clancy, the general secretary of the Prospect trade union, said following the Budget: “This hides yet another sleight of hand for self-employed workers.

“Despite promising to help freelancers, today’s announcement means that financial help for self-employed workers will run out two months before support to employees.

“Throughout the crisis the self-employed have been treated as second-class citizens and this Budget continues that approach with less support, more red tape, and the continued exclusion of many thousands.

“Fully backing the self-employed is not only a moral imperative, it makes sound economic sense to secure the recovery. Unfortunately in this Budget the Chancellor has given with one hand and taken away with the other.”

Mubin Haq, the chief executive of the financial wellbeing charity Standard Life Foundation, said: “Whilst it’s welcome more of the self-employed will now be able to claim the SEISS grant […] this still leaves over three million people who have experienced a drop in income unsupported by the schemes.

“Too many excluded for the past year, far too many facing severe hardship.”

Director of Policy at The Association of Independent Professionals and the Self-Employed (IPSE), Andy Chamberlain, told Express.co.uk earlier this month that his organisation was “disappointed” that many will remain excluded from SEISS.

He said: “We are very pleased to hear that the so-called newly self-employed will finally be allowed into the scheme and make use of the next two grants.

“However, it remains the case that there are well over a million self-employed people who remain without support and have never had adequate support since the start of the pandemic.

“One particular group are limited company directors – they remain excluded from SEISS, so we are disappointed that we didn’t hear what more could be done for them in this Budget.”

Mr Sunak did not directly raise taxes on the self-employed in the Budget, but some are warning that his corporation tax hike could indirectly affect business owners.

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Tax and advisory firm Blick Rothenberg found that following the rise in the business tax in April 2023, the tax directors of companies with profits up to £250,000 pay will be a larger proportion of their earnings than larger firms.

Nimesh Shah, chief executive of Blick Rothenberg, said earlier this month: “The increase to corporation tax may have been badged to target big business, but the effect for the self-employed is clear.

“It may not be an obvious attack, but it achieves the Chancellor’s previous warning that the self-employed would face higher taxes. The tax impact for private business owners receiving dividends is far more severe.”

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