Sunak ‘does not recognise’ 3m excluded self-employed
Chancellor Rishi Sunak has dismissed claims that 3m self-employed workers have been excluded from government support, saying that the figure is “not a number I recognise”.
Sunak responded to a question on the government’s lack of economic support for the excluded 3m by saying that he “didn’t think that it is right to describe those people as excluded”.
In the letter dated 2 February 2020, the Chancellor poured cold water on any additional help for these workers when he wrote: “1.5 million of those people are not majority self employed; they are people who earn the majority of their income from being employed.”
According to Sunak, these 1.5m have somewhere between £2,000 and £3,000 in their returns which he said “is not the overwhelming part of their earnings”, and that universal credit and other support will be “significant in making up the difference”.
He explained that the government’s decision was to help target the support to those who really need it. “If someone earns the majority of their income from employment, it is reasonable to assume that they will benefit from the furlough scheme, and that is how the majority of their earnings come in.”
Sunak went on to say that the principle was supported by every trade association that he spoke with when designing the support scheme, revealing that those conversations supported a higher threshold than the one the government actually adopted.
Chancellor’s assertions challenged
The chair of the Gaps in Support parliamentary goup, Jamie Stone, hit back at the Chancellor’s assertion that he didn’t recognise the figure, explaining that these statistics have been shared as part of the targeted income grant scheme (TIG).
“These people have been denied support unfairly, despite being taxpayers, because of inadequate support scheme rules. The 3m figure is real and it is accurate, you need only refer to the TIG scheme for details,” said Stone.
Stone also challenged the Chancellor’s unwillingness to describe the group as excluded. “It appears that neither the government nor the trade associations to which you refer understand the technicalities of the field of self-employment and small business,” said Stone.
Stone argued that the Chancellor and the trade associations failed to grasp that for the 1.4m in the 50/50 group only some of their employment income is on-payroll, with more than half having a personal income below £25,000; 45% are women working combined jobs.
“These people are not employees, they have no employment rights but still pay tax as if they were employees. That means they cannot be furloughed, but neither can they claim SEISS – and they were in a low-income group to start with.”
The Chancellor signed off his letter saying that he will outline the next stage of the government’s economic response at the 3 March Budget. However, Stone urged the Chancellor to act now. “Any further delay, even until Budget Day, would pile further misery upon this group.”
Scheme to support excluded taxpayers
In spite of the rebuff, campaign groups continue to pressure the Chancellor to help taxpayers frozen out of coronavirus support. The latest scheme is the targeted income grant scheme which was devised by Rebecca Seeley Harris.
Seeley Harris, along with the Forgotten Ltd, the FSB and ACCA devised the directors’ income support scheme (DISS). This initiative aims to create parity with the self employed scheme and would be based on the company’s trading profits, which are contained in the CT600 corporation tax return. In an article on AccountingWEB, Seeley Harris outlined that the “director's remuneration would be added back into the reported trading profits on the CT600, for it to be in parity with SEISS”.
Seeley Harris said that the scheme will be able to use existing information and tools that HMRC already have, so expects that it would be easy to set up.