More than a million people will have to fend for themselves after the chancellor fails to fill any gaps in his support for the self-employed, a trade organization warned.
Chancellor Rishi Sunak said the government would cover 20% of self-employed income after the current system, which covers 80% of income, expired.
He also promised to postpone self-assessment of income tax, a measure that will be “particularly important” for the self-employed.
However, aid is missing out on around 1.5 million people who have received far too little support through the crisis, said Andy Chamberlain, the director of politics at the Association of Independent Professionals and Self-Employed (IPSE).
Only sole proprietorships who filed tax returns in the financial year ending April 2019 were eligible for the previous self-employed income support system (Seiss), and the Chancellor did not appear to close these loopholes on Thursday.
“The support we announced today for the self-employed is absolutely inadequate.
“Although it is correct that Chancellor Seiss extended, the support announced today still excludes every third self-employed person,” said Chamberlain.
“Limited freelancers and the newly self-employed almost entirely missed support during the last lockdown and faced dire months of financial devastation.
“Now they have a dark winter ahead of them, unless the government does more for them.”
He added that the 20% cap on support is likely to prove insufficient for many.
His concerns were confirmed by MPs after the Chancellor made his statement in the lower house on Thursday.
Mel Stride, a conservative politician who heads the influential Treasury Select Committee, welcomed the measures but said many self-employed fell through the loopholes the first time.
He asked Mr. Sunak to say whether the new measures will improve or resolve these issues.
The Chancellor did not answer Mr Stride’s question.
Instead he said, “Regarding the self-employed, I’m glad he welcomes the extension and the existing grant.
“This is something virtually no other country in the world has done, and it comes on top of the most generous support from our self-employed from almost every country in their response to this crisis.
“Of course, I’ll be happy to meet him, but I know he will also be happy to learn that today’s measures to postpone personal income tax assessments will be of particular importance to our independent small businesses.”
Shadow Chancellor Anneliese Dodds said: “Labor has repeatedly called for further targeted support for the self-employed. I am pleased that this is being pointed out. But will these measures avoid the reporting gaps that have affected existing systems?”