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The Chancellor Rishi Sunak

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#COVID19 Action for Supply Teachers 

The Chancellor @RishiSunak has announced an Income Support Scheme to help self-employed people during the Coronavirus outbreak, mirroring the scheme for the employed workforce. 

The new self-employed scheme will be worth up to £2,500 per month for 3 months and will be paid in a single lump sum in June, but it could be earlier if the Government can establish the process sooner. The support will take the form of a tax free grant worth 80% of their average monthly profits over the last three years.

However, there are some notable differences and issues which may suggest that the scheme is not as generous as it first seems, and there are some slightly onerous requirements to navigate.

Firstly, the scheme is only available to those self-employed persons with average business profits up to £50,000, whereas the furloughed worker scheme had no such cap.

Also, the scheme does not recognise the fact that many self-employed persons operate their business through a company; this is not necessarily for any tax reason but for limited liability protection.

The Chancellor proclaimed that the self-employed “have not been forgotten” but a reasonable proportion will not eligible because of the conditions around the scheme.

There was also a suggestion by the Chancellor that the National Insurance (‘NIC’) position for self-employed persons could be ‘levelled-up’ in the future by harmonising the NIC rates.  Currently, a self-employed individual pays 3% less NIC on profits up to £50,000 compared to an employee (but they also have to pay Class 2 NIC which is £158.60 a year).  Given that self-employed individuals have been granted an almost identical package of support to the employed worker (albeit with some restrictions), this could be the pre-cursor opportunity for the Government to end the disparity in the two tax regimes, which it has been wanting to do for some time.

Nimesh Shah, Partner, Blick Rothenberg, said:

“It is fantastic that the Government has introduced a scheme which puts the self-employed on a level playing field as the employed workforce.”

“It was always going to be difficult for the Chancellor to design a scheme for the self-employed because there are too many variables in play, and it appears that it was too difficult to consider those operating through a company.  It’s also another sign that the Government and HMRC do not favour self-employed persons using companies, and it follows the decision to delay the much criticised new IR35 rules.”

Neil Carberry100x100Chief Executive of the Recruitment & Employment Confederation Neil Carberry said:

“This is a cashflow crisis. The support initiatives are the big action businesses and self-employed people need. But to really work effectively and protect jobs, cash needs to come in quickly and be easy to access.

"The Chancellor should now turn his attention to ensuring supported loans are quickly available, businesses receive furlough cash quickly and the self-employed scheme can pay out before June. We will be working to make sure that this package supports the UK’s full flexible jobs market, including one million temporary agency and contract workers.”

mary bousted

Dr Mary Bousted, Joint General Secretary of the National Education Union, said:

“Analysis of the available Coronavirus Job Retention Scheme guidance strongly indicates that supply staff will be covered within it. We therefore call on all agencies to register with the scheme, re-engage workers they have let go, commit to supporting all workers registered with them, and do everything possible to protect the income of our supply staff members.”

Commenting ahead of the Chancellor’s briefing on support for self-employed workers during the Covid-19 outbreak, Dr Mary Bousted, said:

“In these unsettling times it is imperative that the Government gives support to those who need it. Sadly, their response to the plight of self-employed workers in recent days has been far from adequate.

“There is currently a lack of clarity in existing guidance about whether the Coronavirus Job Retention Scheme applies to supply staff. Rishi Sunak has previously stated that all workers employed via PAYE are eligible for 80% cover up to a cap of £2,500 per month, but we believe this should be extended to the self-employed. The Chancellor must be explicit on this point.

“Supply teachers, agency teaching assistants and others working in the education sector must have proper financial stability, on a genuine like-for-like with their PAYE counterparts.

“It is crucial to remember that supply has been the first part of the education system to be privatised. Even when fully employed, agency and supply workers include some of the poorest and most vulnerable members of the teaching profession.

“We are calling on our members to write to their MP demanding clarity on this issue. We are also urging schools to continue to employ supply and agency staff during this period and many have agreed to do so.”

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