In the year since Rishi Sunak delivered his first budget as Chancellor, the UK has been altered almost beyond recognition by the COVID-19 pandemic. In that tumultuous year, few groups have been more impacted by the economic and social fallout of COVID-19 than the UK’s freelancers.
Following months of lost income and uncertainty, freelancers will have been eagerly watching Sunak’s 2021 Spring Budget for any announcements relating to the Self-Employment Income Support Scheme (SEISS) and, of course, IR35.
In that regard, the budget came with both good news and bad news for the UK’s self-employed community. So, what did the budget deliver on the biggest issues facing freelancers in 2021?
First, to the good news, as SEISS was both extended for a fourth and fifth grant and was finally expanded to cover the newly self-employed. While it was generally accepted that the budget would bring with it a fourth round of SEISS grants, there were some fears that this would be the final round.
However, Sunak confirmed that, along with a fourth round covering February-April, there would also be a fifth round of the scheme covering May-July. As with the third round of payments, the fourth round will enable eligible claimants to receive 80 per cent of their trading profits up to a maximum of £7,500 for the three-month period.
For the fifth round, on the other hand, only those contractors whose turnover has fallen by 30 per cent or more will be able to receive the full 80 per cent, with anyone whose turnover has fallen by less eligible for just 30 per cent of average monthly profits.
The main SEISS-related announcement, though, was that contractors who had begun trading in the 2019-2020 tax year would now be eligible for the fourth and fifth rounds. That means that around 600,000 previously excluded freelancers can now claim SEISS grants.
It may have been a long-shot for contractors to hope for the budget to deliver a reprieve from IR35, especially with the new rules just over a month away. In the past few months it has become widely accepted that the changes will go ahead this year and that, unlike last year, there would be no late delay.
Indeed, despite pleas from freelancers and industry bodies, the budget came with no announcements regarding IR35. This likely represents the final confirmation that the off-payroll rules will definitely come into force for private sector companies on April 6th.
Author: Steven English