Is there a simple solution for HMRC to support the self employed?

By Nicky Godding

25 March 2020

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Group of young business people are working together in modern office with laptop, tablet, smart phone, notebook. Successful team in coworking. Freelancers.

The government's response, or lack of it, to helping the self employed is increasingly frustrating the army of five million people who are prepared to forego the safety of employment in favour of work flexibility.

But could there be a solution? Former Birmingham Chamber president and leading West Midlands investor Paul Bassi CBE, is offering suggestions on how to help the hospitality and leisure sector, which has been particularly hard.

He said: “The simplest way to help the self-employed is to take their last three years’ earnings and use that to calculate support for up to 80% of their earnings, to the agreed limit of £2,500 per month.

“Where such freelancers have not been self-employed for that long, a similar calculation from their previous employment would suffice,” he said.

He added: “There are no house rules that cover the current situation. The economic situation changes every day and every developing issue needs to be dealt with on a case by case basis.”

Official figures reveal that there are around five million self-employed people, generating around £300 billion for the UK economy every year.

Mr Bassi said: “Speed is of the essence as people have bills to pay and in some cases will soon be running short of money for the basic essentials such as food.

“I recognise concerns that a system introduced in haste may be open to abuse, but I also respect HMRC’s ability to clawback any overpayments in years to come.

Ian Mean, Director for Gloucestershire at Business West, said that Norway's solution could be a key to the problem. "The government there are paying self-employed workers grants of 80 per cent of their average income over the last three years."

He added: "Pressure is growing for a solution for the self-employed because they constitute 20 per cent of the country’s workforce."

Bassi agrees that his solution isn't perfect: “We haven’t got time to crosscheck every single aspect of some of the measures that need to be taken, but ensuring help for these five million workers is important and needs addressing immediately,” he said.

Paul Bassi is chief executive officer of quoted investment company Real Estate Investors plc, and chairman of commercial property agents Bond Wolfe and Bond Wolfe Auctions.

He also has extensive interests in the West Midlands’ food and drink sectors with investments in leading restaurants such as Asha’s in Birmingham and Solihull, Zen Metro in Birmingham which are currently shut.

By Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.