The latest government statistics show that over one million freelancers in the UK are not eligible for state support during the coronavirus crisis.
The Association of Independent Professionals and the Self-Employed (IPSE) has warned that the lack of support for directors of limited companies and the newly self-employed is driving a drop in the number of self-employed workers.
IPSE is urging the government to consider ways to support "forgotten freelancer groups" in the event of a second wave.
Derek Cribb, ceo of IPSE, said: "The August SEISS statistics are a reminder that although the scheme continues to help a large proportion of the self-employed, over a million freelancers - including directors of limited companies and the newly self-employed - are not eligible for it. This is a stark omission that is devastating to hard working self-employed people across the UK.
"We are already seeing the consequences of the gaps in support in the steep drop in the number of self-employed people last quarter. A second grant opened earlier this week, still without even a nod to these forgotten groups, who now face yet more months with no support. With the threat of a second wave and further lockdowns looming, government must urgently consider ways to support these desperate forgotten freelancers."
Earlier this month, new data from the Office for National Statstics (ONS) showed that the number of UK self-employed workers fell by a record 238,000 in the second quarter of 2020. IPSE has said that the drop in self-employment is "almost certainly" because of gaps in self-employed support during the coronavirus crisis.
IPSE research also shows that self-employed quarterly incomes dropped by 25% after a record fall in the amount of work they were able to secure.
"In the second quarter of 2020, there was a disproportionate and disturbing slump in the number of self-employed in the UK - far more than among employees," said Cribb. "Going into a recession, we would normally expect a jump not a slump in the number of self-employed, as businesses look to the flexible expertise they offer."
Written by Rachel Miller.