IPSE's call to boost self-employed confidence in response to Omicron

With concern over the Omicron variant of Covid-19 growing in recent weeks, messaging from government has shifted in parallel – ‘Plan B’ measures are now in place, the booster jab campaign has accelerated, and the public advised to think carefully about social interactions in the run up to Christmas.

Whilst business closures and other formal restrictions on whether businesses can operate have not yet been introduced in England, the change in messaging will nonetheless hit the confidence of the self-employed who, amid ongoing uncertainty about the full impact of this new variant, will be concerned that the situation could escalate further still.

That is why IPSE has written to the Chancellor of the Exchequer urging him to introduce a range of supportive measures to boost the confidence of self-employed businesses as the sector approaches another uncertain winter. Read on for the full letter.


Measures to mitigate the impact of Omicron on the self-employed

Dear Chancellor,

With Covid-19 cases rapidly increasing and the Government’s message for the public to take greater care in response to Omicron takes hold, businesses are already beginning to feel the impact. As individuals scale back their plans and limit their economic activity in line with the Government’s advice, it is highly likely that work opportunities for the self-employed will scale back with it.

Having weathered previous lockdown restrictions, many self-employed people have exhausted their financial reserves and racked up high levels of debt. News of the latest wave of infections will deal yet another blow to their confidence in both their businesses and the economy, despite the Government’s efforts to ramp up the availability of booster jabs to combat the epidemic.

That is why today, we write to urge you to consider rolling out the following measures, which we believe will mitigate the impact of the Omicron variant on the self-employed sector:

  1. Delay the implementation of the planned increase to National Insurance and Dividend Taxation. Whilst the extent of the disruption that Omicron will cause to the UK economy is not yet clear, freelancers across the UK will be deeply concerned about what the rapid rise of this variant means for their businesses. Delaying the increase to National Insurance on earnings and the tax on dividends will create some breathing room for the self-employed and boost their confidence in their capacity to recover as the situation stabilises.
  2. Suspend the Minimum Income Floor for Universal Credit. IPSE supported the Government’s decision to suspend the Minimum Income Floor during the earlier stages of the pandemic – this measure was a lifeline for self-employed people on low incomes, particularly those whose incomes were vulnerable to the effects of falling economic activity in response to Covid-19. To give reassurance to self-employed who may be about to experience this decline again, the Government should once more suspend the Minimum Income Floor.
  3. Introduce a suite of discretionary, optional concessions for Bounce Back Loan repayments. Bounce Back Loans delivered a significant boost to the self-employed, and for those struggling to repay, the scheme includes generous provisions to manage repayments when times are difficult. However, IPSE is concerned that a sudden economic shock driven by Omicron could place some otherwise viable loan holders in jeopardy if these concessions have already been activated. We urge you to coordinate with the British Business Bank and lenders to introduce a suite of discretionary concessions for otherwise viable loan holders – this could include an optional, additional 6-month payment holiday.
  4. Bring back the 5% VAT rate for the hospitality sector. The hospitality sector, which many self-employed people operate in, appears to already be experiencing a devastating reduction in business for the remainder of the key Christmas period, as the public pays heed of the Government’s advice to reduce social contact.  Whilst the Government has not placed specific restrictions on the sector, the impact of that guidance to limit activities at these venues cannot be ignored. To ease the impact on these businesses, the 5% VAT rate for hospitality businesses should be reintroduced.
  5. Consider the design of financial support schemes to identify ways to include previously excluded groups, in the unwelcome event that they become necessary. These unprecedented support schemes supported the livelihoods of millions, including nearly 3 million self-employed people. But gaps in this safety net were a source of bitter disappointment for those not adequately catered for, or excluded outright, including over 1 million limited company directors. We urge you to review the design of these vital support schemes so that, in the event they become a necessity to support the economy, previously excluded groups will not be excluded again. We would be happy to work with your officials to achieve this.
  6. Extend Statutory Sick Pay (SSP) to Sole Traders. IPSE has previously called for SSP to be extended to Sole Traders, as more self-employed people believe that they should be entitled to this provision since the pandemic. For the self-employed, a day off sick means a day without pay – and with the Omicron variant expected to be more infectious than previous variants, the self-employed may once again be left with an impossible choice between their health and their income. Now is the time to extend sick pay to Sole Traders, protecting their wellbeing and finances as a new wave of Covid infections approaches.

The pandemic is not just a health crisis, but also an economic crisis. As the impact of Omicron escalates, what the self-employed now need is a clear and unambiguous statement that this government stands firmly behind them.

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IPSE
IPSE is the leading association for contractors, consultants, interims, freelancers and the self-employed. We strive to bring our members the most comprehensive and useful range of information and services and all the latest news about what affects your business.