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Twenty (Isn’t) Plenty: A Members’ Experience of the SEISS Extension

Louise Braithwaite, MU member and Professional Oboe, Cor Anglais (English Horn) and Oboe d'amore player, talks us through her personal reaction to the Government’s newest payment scheme for self-employed people.

Published: 13 October 2020 | 12:00 AM Updated: 28 April 2021 | 4:31 PM
Photograph of a box of Oboe reeds.
“The Chancellor’s newly announced support for qualifying self-employed people from November should give me 20% of 50% of my total profits across the averaging period.” Photo credit: Shutterstock

In Glasgow, there’s a residential traffic calming scheme called Twenty’s Plenty. The Chancellor seems to have confused this with an acceptable level of financial support for the self employed. Twenty percent of qualifying profits, from November, for some self-employed people. Twenty’s nae plenty.

People who were previously excluded from SEISS and furlough are still excluded, despite the determined lobbying of the MU, other industry bodies and some MPs. But not my MP, who is still dodging my question as to why the self employed and employed support schemes differ so much in their scope and effectiveness.

I did some calculations on the back of a sanitised envelope. I’d have used a beer mat but I’m staying away from the pub for now.

In the first six months of the current tax year 2020-21 my self-employed gross earnings were 23.8% of those in the same period in 2019-20. I’ve included cancellation fees as earnings.

30% of my earned income since April 2020 has come from work outside music, which hasn’t been the case for over 20 years.

I partially qualified for SEISS grants one and two, which were worth about two months’ normal wages in total.

If I include SEISS I’ve ‘earned’ 48% of my normal earnings in the first six months of this tax year. That’s survivable. I don’t go out. I don’t buy things. I shop at a budget supermarket. I’m frightened of unexpected bills.

My most recent income is ignored in SEISS calculations

The stress I’ve been through just keeping my head above water and looking for new work in an impossible climate has made me unwell. I hear this from numerous colleagues too. Responsibility for family members restricts my alternative employment options.

Half my income was excluded from the calculation of SEISS over the averaging period 2016-2019 because I used to have PAYE employment. Since 2018 my self-employment has more than replaced my former PAYE earnings but my most recent income is ignored in SEISS calculations.

Entering self-employment or full self-employment too recently for SEISS’s liking has excluded a great many people from support. This includes recent industry graduates with good work prospects and freelance contracts already in place.

The Chancellor continues to support employees in businesses. That’s good. I wonder, though, if he was initially over-generous with furlough, only to run into problems later.

The percentage of my essential business expenses has risen

The Chancellor’s newly announced support for qualifying self-employed people from November should give me 20% of 50% of my total profits across the averaging period, starting from four and a half years ago. Ten percent of my actual income after business expenses.

Except it won’t really. It’ll be less than that.

The percentage of my essential business expenses, as a proportion of my earned income, has risen during Covid. I’ve needed to spend slightly less, but not much. Meanwhile, my income has suffered a massive drop.

I did some more envelope scribbling. I considered things that haven’t changed as a result of having less work. The things I have to have in place to advertise my services, adapt to home studio working, and be equipped to take the work that does come my way. Instrument insurance, professional subscriptions and public liability insurance, reed making equipment, DBS, sheet music, website, broadband, quality home recording equipment.

In the first 6 months of the tax year 2019-20, before Covid, my essential business expenses were equivalent to 5% of my gross earnings.

In the first 6 months of the Covid tax year 2020-21 my essential expenses represent 16.3% of my gross earned and cancellation fees income.

  • My expenses this year were 76% of what they were in the same period last year.
  • My income without SEISS is 23% of the same period last year.
  • My income with SEISS is 48% of the same period last year.

I have been allowed to continue to take paid work. Just as well.

True parity would take expenses into account

Furloughed workers are paid up to 80% of their wages, capped at £2500 per month. They aren’t allowed to do gainful work for their employer while furloughed. They can be paid furlough by more than one company at a time, up to £2500 per month per employer. Without expenses deducted. They can take another job with a different employer and do self-employed work.

I’ve received about £8000 less than someone on the same annual wage who happens to be in employment. Where the firm also pays into your pension, pays for equipment, insurance, training.

A scheme for the self-employed which had true parity with the employed might, you’d reasonably expect, have paid the difference between my hard-won 23% and 80% of my earnings in the last year. Capped at £2500 per month of course. Which would have done me fine.

But no.

Trapped along with thousands of others

The 20% SEISS calculation will once again be based on profits after expenses for the averaging tax period 2016- March 2019, before Covid. Currently, my essential expenses are much higher, as a percentage of my total income, than they were then. The Chancellor’s 20% scheme doesn’t take this into account.

My essential expenses are taking a much bigger chunk out of my SEISS grants than they used to from my normal earnings. This may average out a bit more by the end of the tax year. I had relatively high up-front expenses to set up for home recording.

I now earn so little that I qualify for Carer’s Allowance. I’ve given the same level of care (which includes night times) for 6 years but previously earned too much. Carer’s Allowance brings me £67 per week and a free flu jab, which was very welcome. I have to provide a minimum of 35 hours of care per week. I’m not permitted to earn more than £128 per week for myself while claiming this benefit.

Trapping me, and thousands of others in similar positions, at a maximum income of £195 per week. Little danger of breaching that this year. Leaving exposed the low value that this government places on care to support loved ones. A responsibility disproportionately borne by women. £1.91 per hour.

See you, Rishi?

You can hear more from Louise talking on BBC West Midlands about the work that she would ordinarily be doing, why 20% of trading profits is not enough Self Employment Income Support, and the impact on her mental health. Tune in from 3:38:00 on the BBC player.

Take action now

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