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Chancellor responds to Treasury committee on gaps in Covid-19 support

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The chancellor has written to the chair of the Treasury committee, Mel Stride, responding to the committee’s questions on what help the government is giving to those not eligible for the current package of coronavirus support measures.

In particular, the committee asked about the position of the self-employed working through personal service companies (PSCs) and receiving their income in the form of dividends, who are not eligible for support under either the self-employed income support scheme (SEISS) or the coronavirus job retention scheme (CJRS). The committee also suggested widening eligibility for the newly self-employed by allowing a tax return for 2019/20 to be filed and included in the calculations of income.

While the chancellor recognised that PSCs and those who have just started trading may not be eligible for the SEISS, he said the government ‘would not be able to distinguish genuine self-employed individuals who started trading in 2019/20 from fake applications by fraudsters and organised criminal gangs seeking to exploit the SEISS’.

The letter went on to say that PSCs may be eligible for the CJRS in respect of any payments of salary and the self-employed could benefit from relaxations in universal credit.

Commenting on the correspondence, the Treasury committee chair acknowledged the ‘bold action’ taken by government, but said the committee still sees ‘evidence of the hard edges and delivery challenges that need addressing, such as further help for those receiving self-employment related dividends and the slow pace at which emergency loans are reaching businesses’.

The Scottish government has confirmed plans to make available grant funding of £100m for the newly self-employed suffering hardship and SMEs in distress. This will be broken into three separate funds:

  • a £34m newly self-employed hardship fund, managed by local authorities, offering £2,000 grants;
  • a £20m fund for creative, tourism & hospitality companies with up to 50 employees and not receiving business rates relief, offering £3,000 hardship grants or larger grants up to £25,000; and
  • a £45m pivotal enterprise resilience fund, managed by the Enterprise Agencies for vulnerable SME firms who are vital to the local or national economic foundations of Scotland.
Issue: 1484
Categories: News