One in five highly skilled freelancers say they will have to close their business because of the COVID-19 crisis, according to the results of a new survey.
The report, Falling through the cracks, has been produced by University of Edinburgh Business School in association with freelancer body IPSE, and is based on interviews with 1,400 highly skilled freelance workers.
The findings show that 74% of these freelancers have lost income as a result of the coronavirus crisis - with average falls of 76%, leaving 69% of those surveyed with cashflow problems. A staggering 19% say they will have to close their businesses.
The overwhelming majority (91%) said they could not access the government's Self-Employment Income Support Scheme (SEISS), mostly (for 73%) because they work through a limited company. Unsurprisingly, average stress levels in this group have increased by 80%.
Responses from the freelancers interviewed shine a light on the gaps in the government's support packages. One respondent said: "I have fallen through every single crack in this supposed raft of financial support measures. I cannot pay my bills. My income has gone from £4k a month to zero overnight. Despite paying taxes in this country for over 12 years, I am not eligible for any safety net from government."
Another said: "I was made redundant in January. I went freelance until I found another job. I'm an art director. Now all work is cancelled. I have no income at all."
Professor Francis Greene, chair in entrepreneurship and head of the Entrepreneurship and Innovation Group at University of Edinburgh Business School said: "Freelance workers have been particularly hit by the pandemic. Not only have they seen work opportunities dry up as the country went into lockdown, but they have also suffered from a lack of financial support from government to ensure their survival. Our research … sheds some light into the dire situation this valuable working force is in at the moment, which is much worse than we had originally anticipated."
Chloé Jepps, head of research at IPSE, said: "The plight of contractors working through limited companies can make for difficult reading because this group has not just been forgotten, but actually abandoned by the government. This research shows just how heavily this is falling on thousands of hard-working freelancers across the UK.
"It is not only the statistics on highly skilled freelancers that are shocking, but also the stories they tell. One in five of them expects to have to close their business, and this translates to people burning through their savings, having to sell their homes and struggling to feed their families.
"The Self-Employment Income Support Scheme offers generous help to many self-employed people, but it is clear from this that there are gaping cracks in it through which thousands are falling - particularly limited companies and the newly self-employed. The government must urgently think again about these groups and get them the support they so badly need."
Written by Rachel Miller.