The self-employed will struggle during this pandemic

Letters

As a freelancer of nearly 20 years’ standing, I welcome the support package for self-employed people (Coronavirus: UK offers self-employed 80% of earnings, 26 March) . But the exclusion of those who have become self-employed since the end of the 2018-19 tax year is disappointing. It can hardly have escaped the chancellor’s attention that the 2019-20 tax year ends on 5 April – nearly two months before the scheme is expected to begin paying out. So why can’t the recently self-employed be assessed pro rata on the basis of a promptly submitted 2019-20 tax return? Likewise, I hope that assessment of those who became self-employed in 2018-19 will take account of the date on which their self-employment commenced, rather than assuming their earnings for that year represent a whole year’s income.
Rob Sykes
Oxford

• It seems the chancellor’s support for those suffering as a result of the coronavirus pandemic only goes so far. Those recently entering self-employment can apparently go swing. I started self-employment in April 2019 after 44 years of paid (and taxed) employment. As a result I am one of very few people who will not benefit from any grant or help that the government is offering.

At the same time I started self-employment, my wife decided to give up her reasonably paid position to work in a care home on minimum wage. We were confident my income would support us until retirement. My wife’s low income also means no universal credit either. I have lost all my work and income, and the chancellor doesn’t care because there would be a risk of fraud, and yet I will shortly submit my tax return for the year ending 5 April 2020 and subsequently pay tax.
Paul Chapman
Beyton, Suffolk

• In 1996, I wrote a pamphlet for the Institute of Employment Rights. It was called Towards the Insecurity Society. It showed how a scourge of self-employment had exploded in the construction industry in the UK. Relieving employers of payment of national insurance, and with lower rates of tax and insurance for the self-employed, a powerful fiscal drive pushed millions of building workers into false self-employment.

Workers were given no option but to be self-employed: no employment rights, no security, no safety training, no apprenticeships, no pensions. Most were working for the same contractors, under their instruction, using their capital equipment. It was, and is, mass bogus self-employment, infecting most large building sites. I predicted that this fiscal regime would equally drive bogus self-employment into other sectors of the economy. But I could never have foreseen just how widespread this problem would become.

More recently, I calculated that this fiscal driver cost the Treasury at least £1.5bn a year in lost national insurance and taxation, just for the construction industry, never mind other sectors. Now this bogus self-employment epidemic has collided with the coronavirus epidemic. Millions of self-employed find themselves threatened with the abyss of no financial protection. The fiscal and legal regime created a situation in which the Treasury was losing billions each year. Now the Treasury is being asked to bail out the bottomless pit of which it was the architect.

If there could be a silver lining to this crisis, the underlying epidemic of bogus self-employment and the vulnerability it has created needs to be suppressed. Not by any vaccine, but by the justice of good law and equitable tax regimes.
Emeritus Professor Mark Harvey
University of Essex