Yahoo News Economic Package For Freelancers Elicits Mixed Response From U.K. Industry
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The long-awaited economic measures for the self-employed revealed by U.K. Chancellor of the Exchequer Rishi Sunak on Thursday have elicited mixed response from the film and TV industry’s predominantly freelance workforce.
Self-employed individuals can claim 80% of their average income over the last three years up to £2,500 ($3,000) a month, which is taxable. To be eligible, individuals must earn more than 50% of their income from being self-employed, have trading profits of less than £50,000 ($61,000), and have a self-assessment tax return for 2019.
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“The Chancellor has come through, but not without strings,” Shilpen Savani, employment law specialist at law firm Gunnercooke, tells Variety. “You must be able to prove your income, and make sure your tax returns are up to date. It seems this largesse in a time of need will also result in higher national insurance contributions in the future.”
However, the scheme will begin only in June, with those in immediate need of financial aid able to access only Universal Credit or a business interruption loan.
“There are many people out there who have desperately been waiting for the government to act and the chancellor’s measures will provide some relief,” Philippa Childs, head of creative industry union Bectu, tells Variety.
“However, June is a long time to wait and we have been urging the treasury to find a mechanism that will speed up the delivery of much needed funds to people. Our benefits system is not fit for purpose and it can’t be right that those who have already waited this long for a government commitment for support are expected to wait five weeks just for Universal Credit.”
London-based sound designer Emma Butt says the waiting list to apply for Universal Credit was “in the hundreds of thousands last time I checked.”
“You have to call them to get approved before you can get that financial support, but no one can get through. Even then, you still face a five-week wait and it’s also means tested so any freelancer who might have savings over £16,000 ($19,500) will not be eligible and will have to wait until June,” she says.
“By making us wait that long, he is putting a lot of people at risk of not being able to feed themselves or pay their bills.”
One chartered accountant source with 20 years of experience in the film industry adds, “A large number of the millions of self-employed aren’t facing the prospect of losing their work — their work has already disappeared.
“By assessing their grant of 80% on average monthly profits rather than revenue/gross income, it is completely ignoring that self-employed workers have outgoings and business expenses due immediately that will continue to occur,” adds the source.
“A percentage of their gross income equally capped at the same £2,500 ($3,000) a month would have been fairer and far more effective in helping those in need and covering their ongoing costs.”
Several freelancers operate via limited companies into which their income goes and they pay themselves a salary from. Such individuals are not covered under the scheme. One such affected freelancer is Adam Trotman, a Royal Television Award-winning editor whose credits include “Doctors,” “Doctor Who,” and “Come Home.”
“I feel that the creative industry has been totally forgotten by the U.K. government,” Trotman tells Variety. “We contribute massively to the U.K. economy, not to mention entertaining the public while they are in isolation. The limited company set up was a choice that was made for me because of the way the film and television industry is structured.”
Like for Trotman, work for arts organization Day For Night has evaporated overnight, with the closure of cinemas and the stoppage of theatrical distribution.
The company runs the Aperture: Asia and Pacific Film Festival at venues across the U.K. and is a distributor of speciality titles, but their main revenue stream is from subtitling.
Company founders Chonpel Tsering and Sonali Joshi pay themselves basic director salaries under a pay-as-you-earn scheme, which are now non-existent due to income drying up.
The government guidelines for the coronavirus job retention scheme state: “To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organization. This includes providing services or generating revenue.” This created a situation for people in the same boat as Day For Night where to get the subsidy, they had to put themselves on furlough, but are not allowed to work on behalf of their own company.
On the other hand, the scheme announced for the self-employed on Thursday allows them to continue working while receiving support.
The next step for Day For Night was to apply for a coronavirus interruption business loan, but they were ineligible as they found out a business can only apply for a minimum of £25,000 ($30,500) and the amount applied for has to be no more than 25% of 2019 turnover, meaning that the turnover had to be a minimum of £100,000 ($122,200). The company fell short of that and also found out that local banks have their own labyrinthine processes that require personal guarantees for loans.
“So we find ourselves in the position where can’t apply for any of the government support offered to those affected by coronavirus,” Joshi tells Variety. “I know we are not alone.”
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