Chancellor defends not providing more Covid support to small business owners
Following his Budget speech, Chancellor Rishi Sunak MP was pressed on ways in which small business owners might still be excluded from coronavirus support measures when he gave a television interview to financial guru Martin Lewis.
The Budget speech confirmed that there will be two further payments under the Self-Employed Income Support Scheme. Under the fourth tranche of SEISS, claims will only open in late April, even though the grant will cover the period from February to April. Mr Lewis suggested that making the payment this late could cause cash flow issues for claimants, but the Chancellor replied by saying that there was an important trade-off here, and that the delay in making the payment was crucial, as it would allow those who submitted a tax return for the first time in 2019/20 to be eligible for the scheme. Previously, the newly self-employed have been excluded from the first three tranches of SEISS.
The grant payment for the fourth tranche will cover 80% of trading profits, capped at £7,500 for the three-month period. For the purposes of this scheme, the average profits of a trader are calculated over the previous four years.
The fifth tranche of SEISS, which Mr Sunak says will be the last, will open for claims in July. Again, only three months of trading profits will be covered, even though the Government has also made references to the grant covering the entire period from May to September. Here, it will only be possible to claim a grant for 80% of trading profits if the trader’s turnover for 2020/21 is at least 30% lower than in the previous year. If their turnover has fallen by less than 30%, then they can claim a grant for 30% of trading profits, capped at £2,850.
Mr Lewis asked if it would be possible to backdate the support for the newly self-employed, so that anyone claiming the fourth grant might also now be able to claim at least some of the first three payments. However, Mr Sunak suggested this could give rise to a number of issues, including the need for the Government to start clawing back the support given to other claimants.
Mr Lewis also asked about whether additional support should have been provided to directors of limited companies, however Mr Sunak replied by saying that these individuals could already enter furlough for their PAYE income, could have applied for a Bounce Back Loan and could have applied for a six-month mortgage holiday.
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