The chair of the Department for Digital, Culture, Media and Sport’s Select Committee has written to the Treasury asking for urgent clarification of support available for freelancers.
In a published letter to Steve Barclay MP, Chief Secretary to the Treasury, Julian Knight pointed to loopholes in the packages that the government has put in place to support workers during the Covid-19 crisis.
Ian Murray, executive director of the Society of Editors welcomed the DCMS Committee’s request for clarification on the issue of freelance support during the Covid-19 virus crisis.
He said: “In recent years the media industry, particularly at a national level, has moved to one where more and more journalists work on a freelance basis. They provide vital content for print, broadcast and online mainstream media news outlets and should not now face an uncertain future, slipping through the government’s Covid-19 support programmes because of the way in which the industry is now formed.
“It is heartening to see that the DCMS committee members are aware of this issue and seeking support for those thousands working in the media that are not on employee contracts.”
Knight said that while the committee welcomed the Government’s commitment to support those whose employment has been affected by Covid-19, the committee has received a significant number of representations from freelancers and other professionals within the television and film industry, and other creative industries, who do not qualify for any of the support schemes.
Many freelancers were not entitled to support under measures outlined for the self-employed or under the job retention scheme, he added.
He said: “Many freelancers, although technically self-employed, are on PAYE fixed term contracts because they are employed for a fixed period to work on one particular show and then move on to the next job at the end of the production period. It is rarely through choice and usually because broadcasters and/or production companies prefer freelancers to be on PAYE. This means that these individuals are registered by HMRC as being technically ‘employed’ and thus do not qualify for the Self-Employment Scheme.
Through the nature or freelance contracts, many worker often moved from job to job, sometimes with gaps of days or even weeks between employment Knight said and, as a result, they would not qualify for the job retention scheme.
He said: “This means that there is a large number of people who, although on PAYE, were not on a payroll on 28 February 2020 and thus do not qualify for the Job Retention Scheme. Many people who contacted the Committee in this very situation have missed out on qualifying by only one or two days.
There were also issues around Personal Service Companies and Universal Credit he added.
“Many other freelancers are in a position where, upon advice, they set up their own Personal Service Company and, for a number of years, have operated by invoicing for their services through the PSC and pay themselves through dividends. As a result, they do not qualify for either of the aforementioned schemes as they are neither self-employed nor employed,” wrote Knight.
“Many freelancers do not qualify for Universal Credit. Several have stated that they have money put aside in the expectation of paying tax in April but that this will be held against them. If an applicant or their partner has more than £16,000 in savings (regardless of whether it is held aside to pay tax), they will not qualify for Universal Credit at all. There currently is no way to explain to HMRC what these ‘savings’ are for, and if people have to start using them to support themselves, they may be unable to pay their tax in future.
“I would be grateful if you could outline to the Committee what steps the Government will take to ensure that freelancers within the creative industries set out in this letter are supported. I would also appreciate clarification on how professionals in creative industries (such as music, theatre, etc) might best contact Treasury officials to bring Government attention to these outlier cases in future.”