by Kate Hindmarch, partner in Employment Law at Langleys Solicitors

After almost a year of calls for extra support for the self-employed, the annual budget is set to include an extension to the Self Employment Income Support Scheme (SEISS). In addition to the extension of the scheme, there has also been a reform of the eligibility criteria, that had received a large amount of criticism for excluding those who had only started trading in the past two years.

Talking on the topic, Kate Hindmarch said:

“This announcement will be of real relief to the estimated 600,000 people who will now qualify for the previously unobtainable financial support. After nearly one in five self-employed workers in the UK were ineligible for the initial scheme, it will now be offered to those who completed tax returns for the 2019-2020 financial year, offering them a lifeline during these difficult times.

“However, there are still issues facing those who are self-employed over the next few months, as the upcoming IR35 reform is finally due to come into effect this April, following a year delay. This change means self-employed contractors will be expected to pay the same level of tax as ordinary employees without affording them any of the same employment benefits such as holiday or sick pay.

“There is a distinct gap in the law in affording sufficient financial protection to the self-employed, and this has been clearly demonstrated in both these cases. While the government is trying to make up for these differences, the ramifications for the self-employed who have gone a year without support may be irreversible.

“The complicated IR35 reform, which is unlikely to be postponed any further to avoid igniting a new debate over its controversial guidelines, will likely increase the taxes paid by self-employed contractors, resulting in a loss of take-home pay or self-employed workers having to hike their prices and become less competitive as a result.”