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Coronavirus UK: Government announces financial support measures for businesses and workers

Help for employers to cover wage bill, but freelancers and self-employed must claim through benefits system, impacting many people in creative industries

UK Chancellor Rishi Sunak announced a raft of financial measures on Friday afternoon (20th March) amid the COVID-19 pandemic.

At the same press conference where PM Boris Johnson announced the forced closure of clubs, bars and restaurants, the Chancellor announced help for businesses, employees and the self-employed. It seemed to be good news for employers and workers, but the package for self-employed people didn’t measure up in the same way, which in turn will affect the impact of the pandemic on DJs and the electronic music world at large.

There are five million self-employed people in the UK, 15% of the labour market — most people in the creative industries are freelance. The majority of people in the UK’s electronic music industry are self-employed, and they have been told to access Universal Credit via statutory sick pay.

The Coronavirus Job Retention Scheme will allow employers to access a grant, via HMRC, in order to be able to pay up to 80% of an employee’s salary — up to £2500 per month. This can be backdated to March 1st, and will be available within a few weeks. The move was designed to minimise redundancies. In terms of the UK dance community, it means that companies such as record labels, agents and clubs can draw on a grant to cover most of their wage bill, without having to lay people off.

The news for self-employed people wasn’t so good, however. In other European countries such as Germany and Denmark, self-employed people are receiving a substantial percentage of their annual income from the government, calculated through the tax system. But in the UK, self-employed people are being told that they can apply for statutory sick pay through the benefits system — amounting to only £94 per week. 

Self-assessment tax bills, due this summer, have been deferred until January 2021, and there is going to be some help for people renting their accommodation. But the disparity between employed people and gig economy workers and the self-employed is large.

An employee can get up to £2500 per month via a grant to their employer, but a self-employed person less than £400 per month. It was unclear immediately how people on zero hours contracts — bar workers, taxi drivers and others who rely on the night-time economy — would be renumerated during the coronavirus crisis.

It means that an employee of a record company might still be able to earn the equivalent of £25,000 a year. But a DJ who has earned £25,000 in the last year will only be entitled to less than the equivalent of £5000 per year, when all their income has probably dried up over the past few weeks.

Most DJs are self-employed, and many producers, promoters, PRs and music writers are also self-employed, perhaps working for a few different companies on a freelance basis. Their financial help will be considerably less than somebody directly employed by a company.

The UK government is set to announce more details over the following hours. Keep up to day with all the latest coronavirus news from the electronic music scene here.