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Countingup urges Sunak to aid one-person companies

Digital bank Countingup this week called on the government to do more for businesses left behind by the first wave of coronavirus support measures and is asking accountants to support its campaign.

15th Apr 2020
Editor in Chief (interim) AccountingWEB
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Tim Fouracre

In an open letter sent to Chancellor Rishi Sunak on 14 April, Countingup founder Tim Fouracre asked the government to:

  • Support those businesses left behind by the Job Retention Scheme (JRS) and Self-Employment Income Support Scheme (SEISS).
  • Provide more clarity on the process and timings of JRS and SEISS grants.

Digging into the specifics, Countingup said the letter “voices the concerns and questions posed by small businesses, which accountants are hearing day in day out”.

The letter explained: “The JRS and SEISS do not go far enough to ensure the survival of the hundreds of thousands, if not millions, of small businesses who are not eligible. For those who are eligible, the process and timetable for the JRS and SEISS is unclear and puts these businesses at risk.”

Neglected businesses

The outstanding issues with these schemes revolve around the businesses that have missed out so far, such as limited companies with directors who remunerate themselves via dividends, sole traders with previous trading profits over £50,000 and sole traders who started trading after 6 April 2019, Fouracre wrote.

His letter asks for clarity on when grants will be provided, for the process to be sped up, and for terms in the guidance such as “trading profits” to be more clearly defined.

“We estimate that some 90% of all limited companies have just one director and are likely to be using dividends as a primary source of income; 71% of our respondent accountants raised concerns over this group,” Fouracre wrote.

For the newly self-employed, he reckoned there were hundreds and thousands of new entrepreneurs who faced their business being crushed just as it got going.

250 online signatories

After circulating his plea among Countingup’s accountant partners, Fouracre’s letter was signed by 230 practitioners. An online form is now available for any other accountants who want to support the sentiments and at the last count, the company had collected 250 signatures from firms representing more than 70,000 small businesses.

The Chancellor appeared at Tuesday’s coronavirus TV briefing but was more preoccupied with the Office of Budget Responsibility’s coronavirus economic scenario than the workings of the various business support schemes.

But government ministers continue to insist they are listening to feedback from business lobby groups, professional bodies and software suppliers. With legislation due shortly to enact many of the rescue packages, the next few days will give all those seeking clarification an opportunity to study what the government is actually offering.

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