The Association of Independent Professionals and the Self-Employed (IPSE) has welcomed the news reported by the FT that small business minister Paul Scully (pictured) is considering ways of supporting limited company contractors that he can propose to the chancellor.
It comes after IPSE research showed that 45% of freelancers fear they will not be able to afford basic costs like rent and bills despite the government support. It also showed that 69% of limited company contractors believe the government is not doing enough to sustain them through the Covid-19 crisis.
Alasdair Hutchison, policy development manager at IPSE has said that more support is urgently needed for self-employed people working through limited companies. He added: “The limited company contractors we have spoken to are utterly despondent and feel completely left behind. Our research, too, shows that 69% of limited company contractors do not feel government measures are enough to sustain them.”
“The chancellor’s Self-Employment Income Support Scheme was very generous to the people it covered, but there were several holes in the package – particularly limited companies and people who have only recently become self-employed.”
“It is very welcome that minister Scully is looking at ways to plug the gap for company directors. One way to do this would be to include dividend income in the government’s Job Retention Scheme, which company directors are eligible for but only for the small portion of their earnings that comes from PAYE. This would enable many limited company contractors who pay themselves through dividends to make full use of the scheme.”
“Otherwise, we suggest the small business minister considers schemes based on either a temporary tax break or targeted grants for limited company contractors in need. Either way, we urge him and the chancellor to act quickly to extend their support package to this vital and varied section of the workforce.”
