Isolated

February 3, 2021

The coronavirus pandemic has had a profound effect on every section of society. In the business world, its consequences have been felt particularly harshly by the three million limited company owner-directors and sole traders that have, so far, been overlooked for Government financial support. Here, North East Times speaks to a quintet of individuals about their experiences and the feeling of being left alone during the COVID-19 crisis.

It is difficult to imagine just how serious the UK’s unemployment crisis would be were it not for the Coronavirus Job Retention Scheme (CJRS).

As many as ten million people have been furloughed at some point or other since the pandemic began last spring.

If even half of these had been made redundant instead, the headline UK unemployment rate would now exceed all historical precedents.

But while the Government is to be commended for its speedy rollout and sustained backing of the CJRS, its support for the self-employed has been found wanting in some critical areas.

When the Self-Employment Income Support Scheme (SEISS) was first introduced on March 26, 2020, many were dismayed to find they were not eligible for support.

An estimated three million limited company owner-directors, newly self- employed sole traders, sole traders earning less than 50 per cent of their income from self-employment and sole traders with more than £50,000 in trading profits were excluded from the SEISS.

Many of them have still not had any support from the Government 11 months on. Many have seen their income significantly reduced. Some have been unable to trade at all.

What’s now gripping all of them is a sense of disenfranchisement. More could have been done, and could still be done, to close a funding gap that three million people have fallen into.

But will the Government act?

The Federation of Small Businesses has written to Chancellor Rishi Sunak with a number of options to rebalance this inequity.

Among them are a German-style ‘Revenue Loss Scheme’ whereby the Government would reimburse small businesses a percentage of their lost revenue when compared to the same time last year.

The Government could also introduce a ‘Directors Income Support Scheme’ targeted at directors of limited companies, which make up the vast majority of the three million excluded.

The scheme mirrors the existing framework of the SEISS – a taxable grant paid to directors and calculated at 80 per cent of the average monthly trading profits for the last three months.

Mr Sunak has said time and time again that the Government cannot save every business and every job. But would it really be so much to ask that there is equanimity in the support on offer so that people with different circumstances are not left behind?

The FSB recommendations demonstrate that there is more the Government could be doing.

In the meantime, the three million left out must fight to stay afloat.

This photo story is a commentary on how that fight is going.

Each of the following individuals has adapted what they do, where and how they do it, so they can continue to work for themselves and not see their businesses fold.

It’s a perfect example of human ingenuity in the face of adversity.

Here, they tell their story.

Ian Farrar – business coach, public speaker and podcaster
www.far-north.co.uk
@Ian_Farrar

How has your income been affected by the coronavirus pandemic?

Before the pandemic, my business delivered face-to-face business coaching and training. I am also a professional speaker at live events, such as conferences and seminars. When the pandemic first hit, everything ceased. Luckily, the world accepted online delivery, but for a period of two months I didn’t issue an invoice.

What difficulties have you had accessing the Government’s various support schemes and why?

As a director of one of the UK’s two million limited companies, I am not eligible for the Self-Employed Income Support Scheme (SEISS). Company dividends make up the majority of my income. Only income paid through HMRC’s Pay As You Earn system is considered for furlough. For many directors, the PAYE element reflects just a small part of our salaries. Therefore, accessing the Coronavirus Job Retention Scheme (CJRS) and furloughing myself comes nowhere close to my usual income.

What impact has this exclusion had on you on a personal and emotional level?

Personally, I furloughed myself for two of those initial months when lockdown meant lockdown. This has subsequently affected my recent mortgage application and house move. I was declined a mortgage by a lender I had been with for 15 years, even with a full order book. Emotionally, it has been incredibly frustrating watching friends, colleagues, fellow business owners and sole traders excluded by the Government.

How have you adapted your business and what measures have you taken to get through this difficult period?

Far North Ltd is now delivering the majority of our work remotely. Training, speaking, coaching, client meetings are all conducted using online tools. I applied for a Bounce Back loan in May 2020 and upon receipt, I advertised for a new employee to bolster the team. I knew this injection of funds would cover their salary and it felt good to be able to employ someone in the midst of this crisis. This has allowed us to win work in some new and exciting sectors.

How has your outlook for the future changed?

I feel extremely fortunate that my business has flourished – we were adventurous. I wish the Government had been also. My commitment for the future is to continue to highlight the three million excluded. I will raise awareness through social media and communicate stories through my podcast and live streams. My company will offer support to those affected and provide a marketing channel to those businesses that need it.

Hal Branson – comedian
www.facebook.com/halbransoncomedian
@feltnowt

How has your income been affected by the coronavirus pandemic?

Catastrophically! The bulk of my income comes from live comedy and as that industry has been all but decimated, my income has reduced drastically. What has been great though is seeing how the comedy industry has pivoted to take comedy online and provide stand-up gigs for people sat at home.

What difficulties have you had accessing the Government’s various support schemes and why?

The initial issue was getting the Government to recognise comedy as an art form and therefore eligible for grant funding. I run a limited company so was able to get a small amount of furlough payment, but this is nowhere near what I’d normally earn as I take a minimal salary and top up with dividends. I wasn’t eligible for any of the grants as my business fell between the cracks in terms of size and operations, which was really frustrating. I ended up taking a small Bounce Back loan which, while helpful in the short- term, I will have to pay back at some point.

How have you adapted your business and what measures have you taken to get through this difficult period?

It’s been a really exciting challenge to adapt to the current circumstances. A group of North East comedians including myself have launched a CIC not-for-profit company called Felt Nowt (www.feltnowt.co.uk) putting on live gigs over Zoom. They’ve really taken off and it’s provided income and support for comedians in the region.

What more could have been done for people like yourself who have in large parts been excluded from support?

I mean, call me cynical, but it’s hard not to look at the Government throwing literally billions of pounds into a failed track and trace system and award all their friends massive contracts and not think that money could have been better spent/ redirected to small businesses struggling to survive…

How has your outlook for the future changed?

I think amidst all the anxiety and uncertainty there is an emerging market in online performance that will continue beyond lockdown and this has just forced the industry to adapt to the times quicker than it would have done. We’ll continue to include an online option beyond lockdown as it offers an accessible route to enjoy gigs and watch from anywhere in the world. Working collaboratively with people with a common goal and a great ethos has shown there is light at the end of the tunnel.

Caroline Hagan – web developer
www.blueocto.co.uk
@blueocto

How has your income been affected by the coronavirus pandemic?

My business works B2B, so like most small businesses, we saw a dip at the start of the March lockdown because many companies were unsure what it meant, or how it would affect their income moving forward. I’ve been fortunate that I had existing clients on board, and I was able to take on new clients through recommendations.

What difficulties have you had accessing the Government’s various support schemes and why?

I feel for the most part, as a sole director of a limited company, I’ve fallen through the gaps in the support schemes. I don’t qualify for the SEISS and I couldn’t furlough myself, as that meant not working in my business. I didn’t qualify for any local government grants. I did have an office but had downgraded to co-working space in February last year. So, there was no financial support for that sort of workspace and I had to leave and work from home. The only alternative was a Bounce Back loan, through my existing bank, Starling. Based on my previous years’ business profit, I qualified. But obviously, I have to pay that back at some point.

What impact has this had on you on a personal and emotional level?

It is disheartening when you’ve worked so hard and so many unpaid hours to build up your business. Like most directors advised by an accountant, I only take minimum wage so I can keep more money in the business. I have been busy as I’m in digital, but it’s incredibly difficult deciding to take on a new hire for the extra help because it’s another outgoing cost. As a predominantly single parent, I’m also on my own with no childcare or school. It’s been difficult having to just get by and struggle alone. I’ve had a few moments of burnout.

What more could have been done for people like yourself who have in large parts been excluded from support?

I know a group on Twitter called Forgotten Ltd are making a huge effort to see something provided for limited companies. Having some support, whether it’s help with ongoing costs or offsetting some of the corporation tax they will want from us all this year. I think for some businesses, they can only survive so long and will inevitably need support from the Government, so why not sooner rather than later?

How has your outlook for the future changed?

Everything is so uncertain – businesses don’t know how they will continue, so they are likely tightening the purse strings again, like we saw last March. Very little funding is available and many clients were supported by funding schemes, which in turn helped small businesses like mine get regular work. So, even though I work in digital, it is worrying how things may pan out if no new support is offered.

Mark Grainger – copywriter
www.blossomtreecopy.co.uk
@MarkGrainger

How has your income been affected by the coronavirus pandemic?

My income was hugely affected a few months into the pandemic, as my larger retainer clients realised they would need to restructure their outgoings. Unfortunately, that meant a lot of marketing budgets were slashed, and I lost a significant amount of my work. On top of that, other companies were, in the first few months of the pandemic, unwilling to commission new work, which left me feeling adrift for a while.

What difficulties have you had accessing the Government’s various support schemes and why?

I haven’t been able to access any Government support. My agency is set up as a limited company and I pay myself out of the company account. So, the Government support packages, which were at least beneficial to my partner who is also self-employed, really left me twisting in the wind at an absolutely critical time. I’ve managed to get by, but I know plenty of people who have not been so lucky.

What impact has this had on you on a personal and emotional level?

It’s really added another layer of stress and anxiety. Being a self-employed creative, you know there’s going to be ups and downs financially, but you don’t expect to have to try and carry on working at full capacity in circumstances like these without any support. It’s felt like a lot of extra weight on my shoulders. Thankfully, my partner and I are the ultimate cheerleaders for each other because we both know what it takes to work for ourselves, so we’ve managed to make it work. It’s not been easy though.

How have you adapted your business and what measures have you taken to get through this difficult period?

Before COVID-19, I was building up a retainer-based client list. Now though, I’ve been taking on more short-term and ad hoc work and looking to build new relationships. Obviously, the goal is still to secure regular work, but I’ve definitely had to cast my net wider, take on different kinds of projects and living in the moment. One thing the pandemic has pushed me to do is to forge more connections with other copywriters. A lot of work I’ve had recently has come from referrals from other writers, and I wouldn’t have had those connections if we hadn’t sought each other out for support in difficult times.

How has your outlook for the future changed?

I’ve always been aware that I chose a path that sees me standing alone, dealing with issues myself and in my own way, and the lack of Government response has really just highlighted how lonely it can be. Thankfully, I’ve always believed I belong to a community of writers, rather than working against competitors, and that has really been borne out. My plans for the future are to try and re- establish retainer work and create a more niche space for myself.

Martha Gothorp – jewellery designer and silversmith
www.saltandco.co.uk
@saltnco

How has your income been affected by the coronavirus pandemic?

Since the pandemic, I have seen a drop in online sales, presumably as people have less job security and less money to spend on ‘non-essential’ items. I’ve also had no sales through stockists with shops being closed and no events such as markets and arts festivals.

What difficulties have you had accessing the Government’s various support schemes and why?

As I was subletting my business premises, I was unable to claim for a grant using a Small Business Rates Relief code. I have heard of a lot of other businesses in similar situations. Unfortunately, I think my business was just unlucky with timings of events and circumstance. I had already given my landlord notice as I was due to move to new business premises just as the pandemic hit, which unfortunately fell through. I was then left with no premises to operate from, but this has been a blessing in disguise as I have been able to keep my business going with considerably lower overheads.

What impact has this had on you on a personal and emotional level?

I think it’s been a highly stressful time for everyone. I’ve certainly felt the ups and downs of lockdowns and felt high stress and increased worry. I’ve found it really useful to be outside and take a little bit of time for myself. I’ve spent a lot more time surfing, paddle boarding and walking and I’m even more grateful than before to live in such a beautiful place. One thing that has been really lovely is the level of support and kindness on social media. There has been a real increase in shopping locally and that’s been hugely motivational for me.

How have you adapted your business and what measures have you taken to get through this difficult period?

To help keep my business afloat I have taken on a job a couple of days a week, which has been really nice to think outside of the box and meet new people. I also went back to basics with a lot of things. I started stamping my own boxes again, like I did when I first started my business, and tried to recycle as much silver as possible in my pieces. In some ways, it’s been really good to go back to my roots, and I’ve done as much as I can to keep the cost of my product down for my customers.

How has your outlook for the future changed?

I think I am more online-focused with my business, looking to increase sales through that platform as it is looking uncertain when retailers and markets will be able to open again. I’ve tried to focus on growing my social media and building a network through Instagram, which has been a huge support during this time. Long-term, I have always hoped for a shop, but this pandemic has certainly made me question if this could ever happen.

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