Empowering the Freelance Economy

Which governments have valued freelancers and startups the most during the pandemic?

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As previously reported, The Freelance Informer has highlighted the failure of the UK government to support all its self-employed taxpayers whether that is in the form of a freelancer or limited company startup. This lack of support has come at a time when the public has started to realise just how essential and diverse the freelance economy is, according to Anthony Beilin, the founder and chief executive of Collective Benefits, a startup that is developing an insurance, benefits and perks service for the UK’s self-employed.

“What’s been highly exposed during the pandemic is our reliance on the flexible or gig economy, from delivery drivers to prescription delivery people, to people stacking shelves in warehouses all the way to
locum nurses and doctors roped in at the last minute on flexible contracts,” Beilin said in a Tech Crunch interview. “The whole country has been pinned up by a section of people in this flexible economy.”

Yet, UK public policy is not as supportive of independent contractors as other nations in Europe, especially when it comes to those that are highly skilled.

How does the UK stack up to the rest of Europe?

“Other governments have responded with more flexibility, either setting the income ceiling above which support can’t be accessed at a much higher level, or ensuring support is available to all self-employed people who suffer an income hit,” said a Sifted report, The Future of Work: Why post Covid startups won’t ever look the same

The report cites Denmark as an example where any freelancers with an income below 800,000 Danish Krone (a little over €100,000) in 2020 have qualified for support of up to 23,000 Danish Krone (around €3,000) if they expect their revenue to decline by more than 30%.

Portugal, was not so generous at the start of the pandemic with a very low-income ceiling for support, only compensating freelancers for lost income if their pre-Covid revenue was less than €658.22 per month, according to the Sifted report.

“But the government has since relented, compensating two-thirds of income lost by higher earners, up to a maximum of €635 per month,” said Sifted.

Portugal’s government scheme to cover lost earnings for those forced to quarantine at home for 14 days also does not differentiate between employees and the self-employed.

Where and how freelancers have ‘fallen’ through the cracks:

• 69% of UK freelancers say demand for their work has decreased; 81% predict less income in the next three months; 45% may have to close their business if they don’t get support within three months
• 64% of self-employed Europeans say their financial situation deteriorated since the crisis began, and 52% worry about it worsening in the next 3 months
• One in four self-employed European workers lack autonomy and are largely financially dependent on a small number of clients
Sources: Eurofound, IPSE

Greece not only offers a laid-back lifestyle, it offers tax incentives for international freelancers and digital nomads

Greece, it would seem, like Italy has a large self-employed population, and as such has treated freelancers and employees the same in its Covid-19 crisis.

Greece’s main support scheme, according to Sifted, has set to benefit 640,000 self-employed individuals and comes on top of 1.4m employees offering a ‘special allowance’ of €800 for 45 days for freelancers and the employed alike.

The Greek government also extended unemployment benefits to cover freelancers and individuals qualified for the same tax deferrals as
employees, said Sifted.

It also has a very attractive tax environment for international remote workers, freelancers and digital nomads, which you can read more about here in this Freelance Informer report.

Other European governments created specific support measures, including a €1,500 cash grant with additional regional support for small businesses, the self-employed and micro-entrepreneurs with fewer than 10 employees, in France.

Company formation in France was up 10% year on year in June and July, driven by a surge in transport company formations as individuals took to food delivery apps like UberEats and Deliveroo to replace lost income.

Tech startups and recruitment sites in France have also seen a boost in 2020 by the femtech startup investment community alongside news and recruitment sites dedicated to empowering females in the tech sector, as you can read in this interview with 50inTech’s Caroline Ramade.

Freelance Commissioner on the cards?

IPSE has written a joint letter to the UK Chancellor urging him to install a Freelance Commissioner and Future Workforce Commission to champion the UK’s freelance sector, which the membership body warns is “in crisis”.

To read more about the Commissioner proposals, read here.

Derek Cribb of IPSE is spearheading a proposal for the UK government to create a Freelance Commissioner
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