Support ‘urgent’ for ‘the overlooked’
Despite the recent extension of the Furlough Scheme and other support for businesses, there remains a large number of people for whom these schemes are not an option.
Many self employed cannot access the SEISS scheme as they were not self employed early enough. They may be earning less than 50% of their income from self employment, or they may be directors who have previously paid themselves through dividends.
The Institute of Fiscal Studies has estimated that 18% of people for whom self employment made up at least half of their income were ineligible for SEISS. A total of 38% of those with any self-employment income were ineligible.
The Resolution Foundation have said that in every month since April 2020, more than half of self employed workers were receiving less income than they did prior to the pandemic. They claim that government support has been poorly targeted, allowing one in six of those claiming grants to do so despite having seen no reduction in income. This amounted to £1.3bn. Conversely, up to 500,000 self employed workers still had no work in September, and were unable to access any support.
The Association of Independent Professionals and the Self Employed (IPSE) have called on the government to extend support to the ‘desperately struggling newly self-employed, limited company directors and other groups it has so far left behind.’
The Corporate Finance Network are calling for a second Bounce Back loan scheme. This is on the basis that many businesses borrowed the maximum £50,000 or 25% of turnover, but have spent the funds not envisaging a ‘second wave’.
They have said ‘The scheme was introduced to support them through a few months, but as this uncertainty has now continued into many more months, those initial loans have been spent. If they could apply for a further loan, this may support those smaller businesses who still wish to be able to trade out of this crisis but may not have been able to access any other grants or furlough.’
The Head of Technical Advisory at the ACCA agrees, calling for ‘Bounce Back 2.0′, but also for HMRC to review Directors’ tax returns and see whether they need help, calling the existing system ‘fundamentally unfair’.
With so many recognised bodies calling for a review of the current schemes, we’re ever-hopeful that some tweaks or changes may be made that might just be helpful to the many, many company directors across the country.
If there is any announcement, we will of course keep you updated!
If you’re unsure of the support for which you might qualify, please get in touch. We can translate the guidance for you.