West Yorkshire's self-employed earn thousands less than employees

The Association of Independent Professionals and the Self-Employed says a lack of support during the coronavirus crisis has been “devastating” for self-employed people, after they were left waiting three months for government grants.

The latest HMRC figures for the 2017-18 tax year show the median income for a self-employed worker in West Yorkshire was £13,600.

The median is a measure of the average which takes the middle of a range of figures, to exclude very low or high earners.

For employed workers, the median income was £21,800 – £8,200, or 60%, more.

The figures mean that West Yorkshire's self-employed earn slightly less than the average across Yorkshire and the Humber, of £14,000.

Across the UK, self-employed people took home an average of £14,600 in 2017-18 – £8,500 less than the £23,100 that employees earned.

Under a government scheme announced in March to support the self-employed through the coronavirus crisis, those earning less than £50,000 per year could claim 80% of their monthly profits, up to a maximum of £2,500 per month.

Three months’ worth of earnings were paid out in one lump sum – but workers had to wait until June for the payment.

Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed, said their research showed around three-quarters of self-employed people had seen their income drop during the crisis, with an average loss of 76%.

He said: “The self-employed are a hugely diverse group – in terms of both their incomes and their ways of working.

"This diversity has been largely overlooked in the provision of support during the coronavirus crisis, leading to a one size fits all system that has allowed far too many people to fall through the gaps.

"The lack of support has been devastating for them.”

Newly self-employed people, freelancers who work through limited companies, and those who do a mix of employed and freelance work were particularly badly affected, he added.

The Trades Union Congress has raised concerns about low wages for the self-employed, arguing some gig economy companies are using self-employment to get around paying the minimum wage to workers.

General secretary Frances O'Grady said: “While there are many who are happily self-employed, there are too many workers who have been forced into sham self-employment in the gig economy.

"During this pandemic we have relied on many of those who are told by their employers that they are self-employed — like the couriers delivering parcels, and the riders delivering takeaway food — who do not have proper workers’ rights.

"Companies must not be allowed to dodge their obligations, like paying the minimum wage and guaranteeing their workers the rights they deserve."

A spokesman for the Treasury said the self-employment income support scheme is one of the most generous in the world, and had paid out £7.7 billion to 2.6 million people as of June 28.

He added: “As the economy re-opens, we will continue to look at how to adjust our support in a way that ensures people can get back to work, protecting both the UK economy and the livelihoods of people across the country.”

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