One in five highly-skilled freelancers expect to have to close their business because of the COVID-19 pandemic, according new research.
The study by the University of Edinburgh Business School, which surveyed over 1,400 highly-skilled freelancers found three quarters (74%) had lost income, with an average income fall of 76%. As a result, over two-thirds (69%) said they now have cashflow problems.
The overwhelming majority (91%) said they could not access the government’s self-employment income support scheme (SEISS), mostly — for 73% — because they work through a limited company.
Because of this, one in five said they will probably have to close their business.
This will undoubtedly result in people “burning through their savings, having to sell their homes and struggling to feed their families,” said Chloe Jepps, head of research at IPSE.
Unsurprisingly, average stress levels in this group have increased by 80% because of the Coronavirus crisis.
One freelancer saw their income fall from £4,000 a month to nothing overnight.
“I have fallen through every single crack in this supposed raft of financial support measures,” they said.
“Despite paying taxes in this country for over 12 years, I am not eligible for any safety net from government. There is nothing I can do to work and pay my bills.”
Another lost £50,000 ($62,654) of work when the TV industry disappeared and was not eligible for SEISS.
“Despite being a high earner tax contributor for 20 years, when I needed help, I was excluded from the SEISS,” they complained.
They added: “I have now decided to sell my house and work no more than three months a year. I will never again earn more than £50,000 as I have been disincentivised by the government.”
Another admitted to being frightened about their future. “I’m secretly in tears most days. I feel like a failure. Why can’t I get help? Over 25 years I’ve given hundreds of thousands of pounds to the exchequer,” they said.
The research was led by Prof Francis Greene and Dr Alessandro Rosiello at the University of Edinburgh, in assocation with the Association of Independent Professionals and the Self-Employed (IPSE).
It was aimed at assessing the impact of the COVID-19 pandemic in the UK to freelance workers.
Greene said: “COVID-19 has brought in great economic consequences for the UK and freelance workers have been particularly hit by the pandemic.
“Not only have they seen work opportunities dry up as the country went into lockdown, but they have also suffered from a lack of financial support from government to ensure their survival.
“Our research clearly highlights these points and sheds some light into the dire situation this valuable working force is in at the moment, which is much worse that we had originally anticipated.”
Jepps added: “This group has not just been forgotten, but actually abandoned by the government.
“SEISS offers generous help to many self-employed people, but it is clear from this that there are gaping cracks in it through which thousands are falling — particularly limited companies and the newly self-employed.
“The government must urgently think again about these groups and get them the support they so badly need.”