UK Music’s chief executive Tom Kiehl said “worrying gaps” have been emerging within the government’s support for self-employed workers who have been impacted by the Covid-19 crisis.
Following the announcement last month that the measures for self-employed people would not be available until June, UK Music urged the government for “immediate and urgent” support.
Chancellor Rishi Sunak outlined the measures that would include a taxable grant worth 80% of average monthly profit over the last three years up to £2,500 a month. The scheme would initially last three months and will apply to those with trading profits of up to £50,000 a year. The scheme would be only available to those who were already self-employed, and had a self-assessment 2019 tax return.
However, Kiehl noted that almost a fifth of UK small and medium-sized businesses are on the brink of collapse and nearly one million people have applied for universal credit in the last two weeks.
He said: “Measures such as the extension of business rate relief as well as grants for both the employed and self-employed will be vital tools for many who face a battle for survival. However, worrying gaps are emerging in the unprecedented package revealed by the Chancellor last month in what he called the ‘economic fight against coronavirus’.
“Almost a fifth of UK small and medium-sized businesses – an estimated one million firms – are at risk of collapse within the next month as they struggle to secure emergency funding from the Government and banks. The cash crisis could put up to four million jobs at risk.
“In another worrying sign, 950,000 people have applied for universal credit in the last fortnight, reflecting the big fall in income as well as a surge in unemployment as firms go bust or lay off staff because they cannot wait for the Treasury’s retention scheme to start paying out.”
Earlier this month, the Music Managers Forum and Featured Artists Coalition found £50m had already been lost due to the live sector shutdown, including £3.1m lost to managers in commissions. It predicts that a further £68m could be lost if more events are cancelled over next six months.
The Music Producers Guild found producers and sound engineers have lost an average 70% of their income, while the average earnings loss in March was £3,300, rising to £4,300 in April. More than half of those surveyed said they will default on rent or mortgage payments. In addition, the Musicians’ Union said musicians had already lost £13.9m in earnings due to Covid-19 by March 23.
Kiehl has urged the Chancellor to outline interim financial help for the self-employed to help them until the support scheme kicks in in June.
More specifically, he is calling for clarity on the Coronavirus Self-Employment Income Support Scheme. He also asked the government to consider that many in the music industry are directors of their own small firms and therefore cannot qualify for the support scheme or furlough themselves.
He also urged the Chancellor to include the newly self-employed in the grants scheme as it has an “arbitrary and unjust cut-off” of February 28.
Keihl said: “‘We would ask the Chancellor to allow the newly self-employed to file their 2019-20 tax returns in April 2020 to qualify for the same help that other self-employed workers will get.
“Mothers who have been on maternity leave are another group who appear to have fallen through the gaps in the Government scheme. They must be allowed to exempt those periods of maternity leave from their average earnings under the self-employed income support scheme.”
He concluded: “Crucially, the scheme is not set to go live until June, which means many self-employed people in the music industry still have an agonising few months. The music industry is doing its utmost to support for creators, musicians and songwriters and everyone else involved in the sector during this time.”