U.K. Prime Minister Boris Johnson said that while some self-employed taxpayers were “hard to reach and support in the way we want,” any additional support will not be announced before the March 3 budget.
Conservative member of Parliament Peter Aldous had asked Johnson whether he would emulate the Northern Ireland executive’s newly self-employed support scheme, which “is subject to straightforward criteria and guards against fraud.”
The government has put in place an extensive system of support to help employers and employees through the coronavirus pandemic, Aldous noted during Prime Minister’s Questions in the House of Commons on January 27. But he pointed out that many people who started self-employment after April 5, 2019, are “now really struggling” and that their inability to complete a tax return is no longer an obstacle to a claim under the self-employment income support scheme (SEISS).
Labour MP Bill Esterson told Johnson that a constituent did not qualify for a SEISS grant because her tax return showed that she was paid £10 more as an employee than in self-employment. “When are the government going to start supporting those who have been financially excluded so that Alison Powell and millions of people like her can afford to stay at home and play their part in restricting this virus while the vaccine is rolled out?” he asked.
Johnson invited Esterson to send the constituent’s details to him, but he told MPs that “we have spent about £18 billion supporting self-employed people throughout this pandemic and, as I say, we will continue to put our arms around the British people for the duration of the crisis.”
“Most of the newly self-employed who have clung on will now have filed their first full annual tax return. There should therefore be no excuse not to support this group at least,” Derek Cribb, chief executive of IPSE, the Association of Independent Professionals and the Self-Employed, said in a release earlier on January 27.
‘Clear Injustices’
The Institute for Fiscal Studies (IFS) estimates that around 1.8 million self-employed people and around 700,000 company owner-managers are not eligible for support through the SEISS. “There are growing calls for the government to extend support,” it noted in a January 27 release published alongside a briefing note.
The think tank said it is “technically very difficult” for the government to provide targeted support to some groups, including owner-managers and newly self-employed people. But this is not the case for the 1.3 million self-employed people who have less than 50 percent of their income from self-employment or the 225,000 people who have profits in excess of £50,000, it argued. “The government has actively chosen to exclude these people from SEISS,” the IFS said, adding that there are “clear injustices in the way these people are excluded.”
“At relatively low cost, the government could choose to extend the support scheme to both groups, particularly if they created a tapered support scheme for higher earners,” IFS senior research economist Jonathan Cribb said.
"IFS analysis shows that costs of extending SEISS in full to over a million people with less than half their income from self-employment, and some support to those with incomes above the current £50,000 cutoff, would cost around £1 billion per quarter, just 5 percent of the current cost of SEISS to date and just 1 percent of the combined current cost of SEISS and furlough schemes,” said IFS research economist Isaac Delestre.
“Not all that money would be well-targeted on those in need, but much of it would. Indeed, there is no reason to believe it would be much less well-targeted than the current SEISS, which has, remarkably, been taken up by more than three quarters of the potentially eligible population,” Delestre added.
“The human stories of pandemic impoverishment for those self-employed workers who have fallen between the cracks of government support certainly deserve an answer,” BBC economics editor Faisal Islam wrote on January 27. While some SEISS claimants will have increased their overall income as a result of getting the full grant and have only experienced “a small hit” to profits, it is “absolutely undeniable that there are significant tragic cases” of taxpayers denied this type of support, he said.
Job Retention Scheme Updates
On January 25 Chancellor of the Exchequer Rishi Sunak made a Treasury Direction under the Coronavirus Act 2020 to extend the coronavirus job retention scheme (CJRS). The schedule to the direction sets out the scheme applying for the period February 1 to April 30, Treasury said in an update.
HM Revenue & Customs updated four of its guidance notes on the CJRS on January 26 and 27. It also published, for the first time, the names of employers who have claimed grants under the scheme, as well as a guidance note for employers who wish to have their details withheld and “can show evidence that [publication] would result in serious risk of violence or intimidation to you or anyone living with you, [or] an individual associated with your business or anyone living with them.”
Beginning in February, HMRC will also publish each employer’s company number and an indication of the value of the CJRS claim “within a banded range.” These details are being published “to meet our transparency commitments [and] deter fraudulent claims,” HMRC said in guidance for employees.