EIC0103

 

Written evidence submitted anonymously

Submission from an extremely vulnerable single parent who was working full time.

I am facing severe financial difficulties as an extremely vulnerable person and there is no help available for me.

The scheme does not work for extremely vulnerable shielding workers when the employer chooses not to use the furlough scheme. The Treasury notes state:

 

Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.

 

 

As a single working parent, my income has decreased dramatically, and I am worried about my future. I have gone from earning a full time salary that is used to pay my mortgage and to feed and support my children.

 

My income is now purely from benefits. As well as dealing with the demands of shielding, we’ve had to face the problems of not having enough money coming in to live on and the inability to shop around for best value groceries as I’m limited due to problems accessing online delivery slots.

 

I am on a mortgage holiday for three months but state help with mortgages doesn’t kick in until I’ve been on sickness benefits for 39 weeks. Even then it only covers the interest and is a loan that has to be paid back, so it’s adding to my debt. I have no idea how I will pay my mortgage for the six months between the payment holiday ending and the state help starting.

 

 

It is disappointing that extremely vulnerable people are facing severe financial difficulties and cannot do anything about it as they cannot leave their homes to continue to work. I’ve paid into the tax system all of my working life, and I feel let down that I’m now struggling financially through this pandemic while others are getting 80% of their salary paid.

 

 

The scheme would work better if the Government made it mandatory that shielding workers must be furloughed to protect their incomes. If this cannot happen, a new benefit should be made available to give shielding workers enough money to live on and pay their mortgage.

 

 

April 2020

 


 

Written evidence submitted anonymously

 

 

Dear Mr Stride

 

 

I am writing to you in your role as Chair of the Treasury Select Committee looking at the the insurance industry's response to the Covid 19 crisis.

 

 

The reason is to give you evidence of how the insurance industry, in particular NFU Mutual, are viewing business interruption claims.

 

 

We rent out a property in the Peak District as holiday accommodation.

 

We thought that we were covered for loss of income via our insurance policy only to find that NFU have interpreted the appropriate clause in a way that is more restrictive than the policy wording and denied our claim.

We have asked the Financial Ombudsman to examine our claim (our letter to the Ombudsman showing the detail follows).

 

 

In know that it has been well publicised but the purpose of this note is to give you a further example and evidence of how an insurance company seems to be ascribing its own intentions to a policy clause rather than following the wording stipulated within the policy.

 

 

If I can help you in your deliberations in any other way, please do not hesitate to contact me.

 

 

Yours sincerely

 


Extract from our email to the Financial Ombudsman Sevice

 

 

"We made the above claim on our insurance, under the business interruption section, for loss of income due to the Government enforced closure of businesses relating to the Covid 19 outbreak.

We rent out a building as holiday accommodation in the Peak District.

 

 

Our claim letter included the following extract giving our reasons why we felt that we are making a valid claim :-

 

 

Policy number

We believe that our company is insured against loss of income due to the current government lock down through the Public Emergency clause in our policy.

The relevant wording that provides the cover is :-

"loss of income arising from the actions ... of a competent Public Authority, due to an emergency likely to endanger life.              which prevents or

hinders the use of or access to the premises              "

We also believe that the exclusion sentence that follows the above, "We will not pay for any loss resulting from infectious or contagious disease....", is not applicable because before the lock down and certainly now, there have not been any cases of infectious or contagious disease at the ……...

In short, the "cover" sentence has occurred, whilst the "exclusion" sentence has not.

 

 

NFU Mutual have denied our claim giving the following reason :-

 

 

WE will pay for loss of INCOME arising from the actions or advice of a competent Public Authority, due to an emergency likely to endanger life or property occurring within the vicinity of the PREMISES, which prevents or hinders the use of or access to the PREMISES for a period greater than four consecutive hours.” (their capital letters).

 

 

 

Their explanation of the policy clause which, as far as we can see, is not included in the policy was :-

 


 

 

This extension covers losses due to closure or restricted access by authorities following a specific incident or occurrence happening within the specified radius from the insured premises and is not triggered by a nationwide event or global pandemic that spans a substantial period of time.

 

We have responded asking for details of how they have derived the phrases "specified radius and substantial period of time" because we do not think that they are mentioned nor defined in our policy and suspect may have been invented to frustrate our claim.

 

We have not received a response from NFU Mutual to date.

 

I would be very grateful if you could examine our claim particularly to establish whether NFU are interpreting our policy in line with their own intentions rather than following the policy wording.

 

 

 

 

April 2020

 


 

Written evidence submitted anonymously

 

My evidence is focused on the way the chancellor and the treasury have drawn up the various schemes to assist the self-employed and people who are PAYE. It can clearly been seen that large gaps exist between the two schemes and people in very similar financial situations in terms of earnings are in fact being treated very differently. I would maintain that the treasury have made almost no attempts to address the obvious faults in the systems as they stand and that many people are falling through those cracks whilst others are actually in receipt of monies they perhaps not entitled to.

 

         I have just read the chancellors reply to your select committees communication to him about the gaps in the scheme for the self-employed. His argument about the majority of people who are self-employed and earning over the £50000 limit actually earning above

£200000.00 does not hold water, what about the people who earn just over the £50000 limit like me. I just hope that your committee does not let the matter rest at this point; basically all the chancellor has done in his reply to the committee is re stated the existing measures. The system as it stands is grossly unfair and above all the schemes have to be seen to be fair and seen to be so if we are to get through this situation as a united country ready to pay the taxes that will enable us to repay the debt burden taken on during this crises.

 

         I have actually made a freedom of information request to the treasury which is pasted below. This request was made on 23/04/20 and of course I have to wait a maximum of20 days for the information I have requested.

 

Dear Sir/ Madam.

During the Covid 19 outbreak an income assistance scheme has been set up to assist the self-employed through this very difficult period. The scheme has a maximum payment of

£2500.00 per month and to qualify the self-employed person must have a trading profit of less than £50000 in the tax year. This income threshold does not apply to those in the situation of being in PAYE scheme. It is my contention that this income threshold for the self-employed is deeply unfair and based on flawed logic. I myself have a trading profit which is consistently around the mid £50.000’s. I have already got my MP (Mr Kevin Brennan) to send a letter on my behalf about the flaws in the various schemes but I would now like to get hold of some statistics as I am in communication with various national media organisations in an attempt raise the profile of this issue. Mr Mel Stride of the Treasury Select Committee has also raised various issues in relation to the scheme for PAYE and self- employed with Mr Sunak and very recently had a written reply from Mr Sunak. In that reply Mr Sunak stated the following

 

The average income of those who earned more than £50,000 in 18/19 was more than £200,000. It is not right for the government to be giving money to individuals with higher average incomes who are more likely to have access to savings and other resources.              Mr Rishi Sunak reply to Treasury select committee 20/04/2020.

 


I would like to see the statistics that back this statement up. In addition I would like to know the number of self-employed people earn between £50,000 and £60,000. How many earn between £60,000 and £70,000 and of course how many people who are self- employed earn over £200,000. Of course I will need to know how many people who are self-employed are affected by the £50,000 an cut off (and so get no assistance) in total and what proportion of the total number of self-employed this represents. This last point is of particular interest since Mr Sunak has stated that the self-employed scheme will help over 95% of the self- employed. Please treat this email and all questions within it as a formal Freedom of Information Request.

 

I am sure you will appreciate that a timely reply is very important given the pace of events and the number of people affected by this issue and of course I wish to feed back the information to my MP and national media.

 

 

         I am self-employed and have been for many years (over 15 years). My trading profit is in the mid £50,000’s and as such I fall outside the scheme as it is presently devised because I am over the £50000 per year limit. Something I find very difficult to reconcile. How can it be right that a person who earns far more than me who is in the PAYE scheme gets assistance from the scheme for PAYE if they have been furloughed and people like me do not? Those people could earn several £100000’s a year and yet still will be in receipt of the maximum

£2500.00 per month. I have paid taxes all my working life (now aged over 55) and for most of my working life I was PAYE as well.

 

         Mr Sunak did state that the scheme would cover 95% of the self-employed is that really correct?

 

         I am a genuinely self-employed person with around 900/ 1000 customers a year as most of my jobs are very small jobs paying small amounts so am not a contractor trying to avoid tax and working for just one employer (though of course this is perfectly legitimate from a tax point of view as far as I understand).

 

         I have always felt that opting to go into a limited company structure as a way of reducing my tax liability would be immoral so I have never gone down that road. It is my understanding that if I had done so I would now be able to claim 80% of the PAYE payment I had paid myself but not the dividends. So people who took steps to reduce their tax liability are better off than me under the scheme and probably earned more from their self-employment as well! Again of course I recognise this is a perfectly legitimate tax practice though not one for me on moral grounds.

 

         I have always declared all my income and of course not all self-employed people do that in an effort to avoid tax. So I find myself in a situation where I am being penalised for my honesty. How can that be right? I personally have become recently aware of people who have under declared revenue and so are now eligible to receive the payment

 

         The situation with corona virus has badly affected my business. I have virtually no work and cannot see it getting back to normal for many months. In fact I expect it to last until the end of this year at least with my business. My occupation involves going into people’s houses and of course people are worried about that and I think it will take a long time for people to

 


regain confidence. I have large amounts of work booked in but now those people will not let me do the work.

 

         I notice that with the PAYE scheme it has been decided that people who have been furloughed and are going to receive payments can also work for another company whilst being paid by the tax payer. How can that be right, we are in a situation where the number of people going onto universal credit is going up massively yet they are potentially missing out on such employment opportunities? With such large numbers on universal credit it must be possible to find the people with the skills to fill any employment vacancies without using people who are already getting a payment from the tax payer. Only a few days ago I came across a person who is now working for a supermarket on the checkout whilst being furloughed from a fairly senior role, you can imagine how I felt.

 

         I understand also that it is possible to be furloughed from two jobs and receive 80% of your salary up to a maximum of £5000.00 per month. How can that be right when a people in my position receive absolutely nothing? Clearly the people receiving the maximum of £5000.00 a month must be on a significantly higher salary than I would ever get from my self- employment. When I consider this I also think about those poor people who just happened to change jobs at the wrong time and now receive no support whatsoever. I understand that around 200,000 people per month change jobs. I know that they have recently altered the cut-off date for the PAYE scheme but as far as I am aware this will not help most people in this group as they are paid monthly and HMRC would still not have a PAYE record for them by the cut-off date. When they altered the date the treasury must have been aware that it would have minimal affect. I saw a poor man on channel 4 news after the cut-off date was changed with a family to support. The man was close to tears on national television and of course the scheme for PAYE will still not help him. He pleaded with the chancellor to do the right thing, a sentiment I fully agree with.

 

         Of course since I am self-employed I have to make my own pension arrangements and so am fully invested through a SIPP in the stock market and you can imagine what affect the recent events have had on the value of my pension. So In addition I find myself having to pay tax to support workers in the state sector (plus MPs on a 40th Final Salary Scheme topped up by the tax payer from time to time) who are in pension schemes linked to their salary who face no such risk. And we all know that the members of such schemes contribute into them nothing like the true value of these schemes benefits. What’s worse when they retire the benefits are multiplied by 20 when being assessed against the life time limit for tax purposes when most actuaries agree it should be multiplied by 40.  Again this just illustrates how unfairly the self-employed are being treated. For me to achieve anything like the pension of a person employed in the state sector most actuaries agree I would have to have a fund twice the size of the assessed value of the state sector person and I would be taxed accordingly should I breach the £1million limit.

 

         When the scheme for the self-employed was announced a threat was made re the level of tax/ NI the self-employed pay. Such threats take no account of the fact that we have to provide for the full cost of our own pensions, holiday pay and sick pay. Any move to make us pay the employers contribution for NI would be deeply unfair after all a PAYE employee does not pay that, the employer does.

 

         An article was published in the Financial Times on the weekend (18/04/20) which discussed a quirk in the coivid 19 assistance for small businesses whereby a tax free grant of £10,000 was available to owners of second homes in areas like Cornwall who had changed the status

 


of their second home to avoid paying council tax. Again I cannot see how that is right. Apparently these people do not even have to prove that the property has been let they just have to say that it is available to let for at least 140 days per year and have a turnover of less than £15000 per year. So people who used a device to avoid council tax are now going to get a £10000 grant as well. I am sure you can guess how the councils feel about that.

Apparently Mr Sunak wrote a report in a previous government role condemning such practices yet now he proposes to give them this money.

 

         Also in the financial times (18/04/20) it was an article about members of the House of Lords who apparently are deeply unhappy that they may not get their attendance allowance (£327.00 per day I think) because they are in isolation/ may meet virtually. Apparently certain members are demanding payment even though they will not be attending. This payment is not taxable and I think amounts to a tax free sum of £48000 per year. If a country is to pull through this crisis then we really do have to ALL BE IN THIS TOGETHER as Matt Hancock etc. keeps saying. For that to be the case the schemes have to be correctly and run on moral lines. After all when we get through this we are all going to have to pay the taxes necessary to get the country back on a sound financial footing.

 

         In the end people like me have little political power and we may just have to accept the situation. Mel Stride of the Treasury Select Committee has stated that Mr Sunak should remember that the savings of the self-employed are their pensions and of course he is right, we have nothing else to fall back on.

 

 

April 2020

 


 

 

 

 

 

Written evidence submitted anonymously

 

We are a local haulier who has an operating centre at […]. We applied to Mid Devon District Council for our Business grant as we are in receipt of Small Business Rate relief. We have been refused the business grant by MDDC as they say they don’t pay out on parking places. This is much more than that, it is our operating centre for 10 H G V vehicles, for which we required both planning permission, and approval from Western Traffic Area. The website states that personal parking is not included for the grant, but this is in no way personal parking. We fulfil the requirements, so should receive the grant. We have had to park up seven of our HGV vehicles for the last six weeks, which has had a dramatic effect on our business. There are still standing costs involved on the lorries, regardless of the fact they are parked up, and we need support which we are not getting.

 

We would be grateful for any help you can give in aiding us to obtain this grant.

 

April 2020

 


Written evidence submitted anonymously

 

 

We are a small self -employed business partnership. We find this unfair for the following reasons.

Job protection scheme and self -employment income - support scheme

 

There may be two earners of £49,000 in the same household and both are entitled to getting government help up to £2500 each per month: ie: up to £5,000 per month for both. I am the main earner in our family. My husband doesn’t work. My business partner is the only earner in her family too.

Therefore, if nothing else our tax bill should be CANCELLED not delayed until January. By then we won’t have anything left as we won’t have earned anything to pay our tax bill.

 

We feel everyone who has a small self- employed business should be entitled to something.

 

 

 

Which sectors are likely to be impacted by economic scarring:

 

Our business deals directly with actors is likely to be scarred for longer than most, it’s impossible to make movies, tv drama, theatre and commercials (we are all sick of zoom versions) for the foreseeable future. It’s impossible to social distance when acting out a script therefore there are no productions (or very limited) being made in the UK.

 

Our business is therefore dead after 25 years. Our earning power has been cut to 0. By June if the acting profession isn’t back up and running, we are all going to need help within our industry. This still hasn’t been addressed at all by the government at this time.

 

BREXIT: A main issue for the acting business as well. We send loads of British based actors abroad to work all over Europe for TV Commercial projects. Again, how is this going to continue when nothing is agreed for this industry with the EU. Therefore, our business can’t survive after Brexit. DOUBLE WHAMMY.

 

Thank you

 

April 2020

 


 

Written evidence submitted anonymously

I am writing today to various individuals in both local & national government. I have been seeking answers into an anomaly in the thresholds for business rate support grants for over 3 weeks now. To this date my questions remain unanswered.

 

I have specific questions as a concerned business owner seeking clarity on the promises made to me by the Chancellor and the Treasury since the government asked the public to stop visiting my business and the ordered closure of my Public House. During various public speeches and on official documents released since, we were promised a cash grant of £25,000 to protect our business during these tough times.

 

As a result of the support being promised by the government together with the coined phrase of 'getting through this together', we closed our business and co-operated with the governments plea to 'stand by its workers', not only in agreeing to furlough them, but also ensuring that they suffered no financial hardship at all by ensuring they continue to receive 100 percent of their regular wages during these unprecedented times. We also paid all of our overheads to keep the cash moving to other businesses under the belief the government would stand by its promise that we "wouldn't be alone".

 

 

Our business has a rateable value of £15,000 (rounded down). Under the long standing 'small business rate relief' scheme we have never been able to benefit, as we have missed the relief by a narrow margin. Below is a series of facts that led us to believe we would receive a grant of £25,000.

 

Documented Evidence

 

 

 

 


 

 

 

 

 

 

The department of Business, Energy and Industrial Strategy (BEIS) will provide guidance for local authorities on how to administer these grants shortly”

 

 

“Under the Small Business Grant Fund all businesses in receipt of Small Business Rate Relief or Rural Rate Relief in the business rates system will be eligible for a payment of £10,000”

 

Again this falls in line with the Chancellors promise that those in receipt of SBBR or RRR would receive £10,000 whilst those like us who were going to benefit from the extended retail discount scheme would get a grant for

£25,000.

 


 

In Summary

 

The Chancellor of the Exchequer made it clear that any business who had received either Small Business or Rural Rate Relief would get a grant for £10,000 and those who were benefiting from the extended retail discount as of 11th March 2020 would get a grant for £25,000.

 

The publication of the Covid 19 – Business Support document on the Government website together with the Treasury document on Business Grant Funding, both of which confirmed beyond any doubt that businesses with a rateable value of £14,999-

£51,000 would get a grant for £25,000 was a statement which backed up the Chancellors promises.

 

It was stated very clearly that the Department of Business, Energy & Industrial Strategy (BEIS) would issue guidance for the local authorities to follow based on the information already available. It was never stated that this department would change the thresholds and withdraw the promises of the Chancellor & the Treasury. The new guidance changed the figure of £14,999 to £15,000 and in doing so placed many businesses like mine into the same category of those previously receiving rate reliefs, which I have not been fortunate to ever receive.

 

When I contacted the Governments Business Support Helpline to discuss my situation they assured me that as my business has a rateable value of £15,000 I would receive a grant of £25,000, when I explained that I had received only £10,000 they assured me that contradicted their information.  When I explained how the thresholds had changed in one document, they were at a complete loss as to how or why this had happened.

 

I can only hope that the moving of the thresholds and the resulting reneging of the promises made by HM Treasury is an oversight and was done without intention. Nobody is yet able to clarify this or attempt to address how it has happened.

 

Summarised Questions

 

 


knowingly place unfair financial strain on approximately 3,700 small businesses who have had to stop trading on Government advice?

 

April 2020

 


 

Written evidence submitted anonymously

 

Please accept this letter as a formal request to amend the current business rate relief criteria and ensure that businesses that are closed and genuinely suffering from the Covid-19 hysteria are provided 12 months relief.              Specifically including the Print Sector & Exhibition Sector.

 

1.   Situation

[…] is my business and has been running profitably for the past 23 years and consequently paid around £10,500 per annum in business rates to the local Broadland Council.

 

Due to the Covid-19 situation I have had to furlough all 9 staff and close the business.              70 – 80% of our clients are operational in the exhibition and event sector.              A sector that I now gone for the next

18 months due to the continuation of social distancing.

 

2.   Problem

I have seen Rishi Sunak in the House of Commons confirm that the exhibition sector will be included provided those companies have a physical property, they will benefit from rate relief and the grants.

 

We are now seeing some councils start to pay these companies.

 

[…] is classified as a printing company, so there is the issue with the SIC code, however, we still service this industry significantly.

 

One point to consider is that the injustice on this situation is the supermarkets that are doing some £500 Million a week better in sales along with the DIY stores, these companies are benefiting from 100% business rate relief.              Meaning their profits will have sored next year, all the while cost the UK economy over £3 Billion in lost collections.              Can you confirm who is going to cover that?              Are we as businesses going to be told that we need to pay more for our rates because last year was not particularly good?

 

3.   Implications

The implications of this to me and my business mean that when I return to work with a team of 8, probably 4 – 5 of which will be made redundant I am effectively having to start again from zero to build the business up.              All the while this means I will have increase fixed overheads in the deferral’s on payments I have received during this time.

 

The absolute worst-case scenario is that I will have to close the business, sell off the assets and make all the staff redundant.

 

I know the banks are looking at CBILS loans, however, these are purely loans and need to be repaid with interest.              So, I’m effectively being asked to borrow money in order to continue paying my business rates and other associated costs which will have gone up and my income gone down in the hope that at some point next year

 


business returns to normal, however, there is no guarantee things will return to normal within that time frame.

 

4.   Solution

The only solution to this problem, is that all businesses that have been forced to close and furlough all staff they too should benefit from 100% business rate relief for 12 months also, along with the grant of £10,000.

 

Implemented with immediate effect, allowing the print sector to be included due to their close relationship with the exhibition sector.

 

5.   Approval

Please can you respond to this letter with confirmation of either approval or disapproval by confirmation below.

 

Approve / Disapprove

 

 

I hope you find the above interesting and look forward to your response on this important matter.

 

May 2020

 


 

Written evidence submitted anonymously

 

I would like to focus on the SEISS. In particular the arbitrary £50k cliff edge cap.

I am a sole trader mortgage & insurance broker who has seen significant impact to my sector, and my personal trade, owing to the Covid 19 crisis. I am submitting evidence as I am outside the scope of any taxable grant assistance whatsoever and with no prospect to date of society functioning fully anytime soon. I believe it only correct that the gaps in the scheme are filled.

It’s now almost impossible to trade new mortgage business for a house purchase. No viewings, lenders pulling higher LTV rates, no level two lender surveys as examples of the current position. What is equally if not so more concerning is that this sector of trade will only truly operate if all factors can operate together, starting with the vendor showing a prospective buyer around, then to allow a surveyor into their home etc

So anyone on mandatory 12 week shielding this is not an option for circa another six weeks minimum.

The interim measures such as virtual viewings (where applicable) desktop surveys etc are in reality from my experience are not working. Would you buy a house if you couldn’t see it?

Many buyers are holding back, understandably, until the process can be followed with pre covid procedures and full market options.

The slump in new business house sales, new mortgage business, posted nationally also confirm this. Insurance applications are also very difficult. I am experiencing insurers withdrawing from offering an application process when a GP report is required as consideration understandably is given for GP’s to deal with Covid 19 customers. GP practices are also rejecting pipeline applications for information submitted pre lockdown ‘until further notice’

So the Government’s notion that self employed sectors can continue to trade very much depends upon what trade can be obtained, at at what level. New business in the group outlined for me, mortgages attributed to new house sales to date, is down totally, 100%. There is a little bit of trade potentially available but since March it’s being significantly restricted and reduced as expected.

Finally there is currently a battle to hold onto (and not always successful) ‘pipeline’ income built up prior to the lockdown. With people withdrawing from transactions So it’s a ‘triple’ hit, pipeline income lost, current income lost, and future income lost.

 

I am submitting evidence as I believe that the SEISS scheme has significant shortfalls which whilst publically noted by key figures of society , appear to be simply ignored to date. I belong to the excluded Self Employed sector and understandably I am concerned about this, taking into account the above and the near term unknown future. I believe this sector overall to be way in excess of 5%.

 

Problems Claiming

The Arbitrary £50,000 Cap. There is your answer right there. You cannot claim if you are a penny over. It is a cliff edge. From self-employed Income if it is deemed that you have earned a penny too much, even from up to four years ago. You deserve no help. We are tagged by the chancellor as ‘super rich’ and bracketed into a £200,000 earnings bracket. This, from my own personal position is simply incorrect. I fall £115 outside the scope of any help.

£115 one way and I am tagged as vulnerable £115 the other way and I am tagged as ‘super rich’

In a national crisis this is just incredulous. Especially as it is compared to the unlimited PAYE scheme currently paying to some employees earning significantly more with an unlimited cap threshold.

There are thresholds which are far more relevant such as the 45% tax rate, VAT rate, and even the upper child benefit rate.

A cliff edge is an unjust and unfair system (particularly bracketing everyone into the £200k bracket) it’s not unreasonable to suggest a taper would be far better and target as I feel as intended.

 


Just a suggestion.

50,000.01 to 100,000 – a reduction of 1% for each £1,000

£100,000.01 – 50% reduction.

It’s still a compromise to the unlimited PAYE scheme.

You could even impose a harsher taper, should you feel it necessary, to a cap more in keeping with the targeted market.

When the chancellor announced the SEISS he did so with the strapline ‘if we all want to benefit, we all have to pay back equally’

I have no objection to raised taxes, NI, VAT etc it is expected. But how galling is it to hear this when you are excluded. How can we all benefit (with taxable grant help) if you are told you don’t qualify?

 

This taper could be rolled out as a ‘phase two’ scheme. Anyone a penny over the £50k cap I am sure would be happy to wait for taxable grant assistance, or even an option to reduce the 31 July 2020 tax bill by the equivalent grant amount as currently they are offered none. No help at all.

Deferring a tax bill is of no assistance at all. It still needs to be paid, whether in July 2020 or Jan 2021, it still needs to be paid. A reduction option to this would be a significant assistance to many, alongside the other option of a taxable grant paid.

 

Has the Government struck the right balance between targeting support Certainly not.

The SEISS scheme, appertaining to the £50k cap I believe has two entry qualification criteria

 

2018/2019 Rule

£50,000 or under – instantly qualify

 

Averaging Rule, 2016/2017, 2017/2018 & 2018/2019

£50,001 – 2018/2019

£47,000 – 2017/2018

£54,000 – 2016/2017

Average - £50,333 – Not qualifying

 

Averaging Rule, 2016/2017, 2017/2018 & 2018/2019

£50,000– 2018/2019 – Instantly qualifies, no averaging required. However for the sake of comparison

£76,000 – 2017/2018

£69,000 – 2016/2017

Average - £65,000 – Qualifying

 

I would deem the second person to have the better financial resources. However as they earned £1 less in 2018/2019 they are deemed the financially vulnerable, even though their average is just under £15,000 PA higher than the excluded person?

A fair taper for the excluded would eradicate this injustice within the SEISS. Loans replacing Grants as income

This is not an option.

Whatever the chancellor would like to call them, bounceback or otherwise taking out a loan, increasing debt when we don’t know when society will be functioning properly again, when we can trade properly again, is not a sensible option.

 


 

 

No Business Premises

Many Self Employed over the cap do not have business premises, so are not entitled to business rates grant relief either. They also have no PAYE portion of their income to furlough. It truly is the one fully excluded sector.

 

Universal Credit

Call me old fashioned but I was always taught to save for what you need and only spend what you need. So by saving for a new vehicle (mine is 19 years old) that I was due to replace next year, and for my pension it is deemed that it is best that I use my savings so deserve no help here.

Please don’t say universal credit is a viable option to replace the taxable grant for someone a penny over the cliff edge. However if I had spent all my savings on a new car and maybe fancy holidays I would at least be able to claim circa £400 pcm. This is incorrect. A tapered grant would remove this. It’s also dangerous to remove any funding you may need for new stock, machinery etc.

 

How Successful has the Government been in plugging the gaps? Completely unsuccessful. This is almost as disappointing as the cap itself.

Significant figures of society have raised the issues of the SE £50K cap, such as Sir Edward Davy MP, Sadik Khan and significant bodies such as the BDA. Yet all we have had is complete radio silence on the matter. It looks like they have just being completely ignored.

If the Governement have no intentions of looking at the SEISS again, then the min they can do is tell us. It’s no point filling in forms like this if they are irrelevant. We do not expect instant change (however the PAYE scheme was changed relatively quickly from a 28/02 to a 19/03 date) but we do need to know if they have no intentions of considering change. I did believe that the chancellor ‘would do whatever it takes’ as he stated. If not, at least have the decency to tell us now.

This may make the difference for an excluded sole trader to decide whether to close up shop now or continue to use personal savings in the hope that some resolution or middle ground can be found.

 

What gaps in coverage still remain

The arbitrary cliff edge cap. No taxable grant assistance above this at all.

Ltd Co Directors No consideration taken for dividend payments in respect of taxable grants First Year traders. No consideration taken in respect of taxable grant options.

 

How Viable is it for SEISS to open for longer?

The treasury will have the financial figures for this.

However what I can tell you from public experience is that we are seeing (permitted) business reopening again now before any lockdown phase two. Garages, pet stores etc, local businesses who through potential exclusion have little choice, previously closed.

A business still has overheads, Insurances etc all to pay for. As well as your personal living costs. Whether you have business premises or not outgoings continue.

You cannot expect these to live off fresh air or savings or to supplement lost income with savings for potentially the rest of 2020.

This is why traffic is increasing.

The push to open up society again from my own experience is largely coming from business owners and small traders excluded. This could be a disaster if we open up society incorrectly.

 

Thank you for taking the time to consider each of the above points raised which I hope you find fair, rational and considered.

 

May 2020

 


 

Written evidence submitted anonymously

 

I write in connection with the Self Employed Income Support Scheme announced by the Chancellor in March.

My wife and I are not eligible for this grant and I would like to explain why this is so unfair to us and apparently 250,000 others.

I have been self-employed for 37 years, always paid my taxes, national insurance and VAT on time. I have always submitted my tax returns on time.

Due to coronavirus all work was cancelled and therefore my wife and I have zero income.

During 2016/17, 2017/18 and 2018/19, the 3 years used for the calculation of the grant, I invested in my business and therefore made tax losses. Because of this, using the averaging my grant is £0.

In 2019/20, mainly as a result of my investment, I made a profit, but this is unfairly not taken into account for the grant. In fact, my 2019/20 year, is based on my financial year 7.5.18 – 7.5.19 as the self-employed pay tax on the ‘previous year basis’ i.e. the financial year ending in the tax year. I have also made profits this year to 7.5.20 so in actual fact I have been making profits for 2 years, but none of this is taken into account for the grant. The ‘previous year basis’ is not my choice, but the governments. Obviously those who are employed and taxed on an April to April basis would not have this problem. I am hoping the Chancellor did not have this in mind when he designed the scheme and can be convinced to change his mind.

The Chancellor announced that to include 2019/20 would lead to fraud, but I am honest and hardworking and always declared every penny. This announcement suggests everyone will be fraudulent and obviously the vast majority of honest people are penalised. The priority should be to help all self-employed people during this pandemic, as he has suggested, but for some reason this is not the case.

The Chancellor also said he could not include 2019/20 as the deadline for the return is 31.1.21. I do not understand why this is a problem as returns can now be submitted from 6.4.20.

Ironically, the Chancellor extended the deadline to file tax returns for 2018/19 from 31.1.20 to

23.4.20 to give those self-employed who didn’t return on time to file a tax return and potentially lead to fraud that obviously we all want to avoid.

I know the exclusion of 2019/20 has affected many thousands of self-employed, especially the newly self-employed whose first tax return is 2019/20.

The Chancellor has admitted that he has not helped 5% of self-employed, some 250,000 tax payers who receive no grant at all. Why should we be different? As the Chancellor says, ‘we are all in this together’ but he refuses to support everyone together.

Also, as regards the Chancellors rule that self-employment income must be more than 50%, my wife is self-employed but also has a part time job. In 2018/19 the part time job was £200 more than the self-employed profits so again the grant she gets is £0. I don’t understand why the Chancellor should have this rule and again is totally unfair. My wife took the part time job to supplement the self- employed income but she is being penalised for this Why?? She is not entitled to be furloughed for the part time job.

 


I simply ask for 2019/20 to be included in the calculation of the grant with suitable proof of income / documentation and the 50% rule removed. We have no income, no savings and only have working tax credit. We are not entitled to any other help as we have service businesses working from home. Without help from this scheme we will have to go into debt and severe financial poverty.

Why are we being left out?

May 2020

 


 

 

Written evidence submitted anonymously

 

A Case History of a Wycombe Town Centre Restaurant and Its Insurance Company

 

A few years ago, Wycombe District Council actively invited local café owners in High Wycombe to open a restaurant […] in the town centre in order to help bolster the High Street offering and be local champions of the independent food sector. As a new restaurant business it opened with community support, raising £17,000 through crowd funding. It had no bank loans or overdraft facilities, nor even a credit card (as the banks would not invest in the company until it could prove trading). It is now VAT registered and has high ratings on social media.

This fantastic initial success made the restaurateurs proud they had contributed to the regeneration of the town centre.

 

The restaurant owner is impressed by the Government’s businesses aid package, particularly the rate payers grant and furlough scheme. This means he has been able to pay staff, in full and on time, and also pay suppliers so they too can remain trading, or open again once the country is back to some kind of normality. In essence, he’s been able to limit the financial impact of the pandemic slightly because of some of the provisions put in place by the Government.

Unfortunately, although the support has been fantastic in the short-term, it’s unlikely to be enough to allow […] to survive.

 

There is a serious issue with the restaurant’s insurers. The owner appreciates these are unprecedented times for insurers. However, he thinks this should not mean insurers can unfairly seek loopholes to the detriment of swathes of small businesses when the black and white of an insurance policy should provide some safety net. He is of no doubt there are many small businesses that are in the same situation and need a larger voice to speak for them too, either to bolster the insurance claims, or have the Government help the insurers to help business. The reality is business interruption insurance is the last bastion of hope for many small-scale enterprises. It exists because when companies are forced to cease trading, they do not have the reserves of other larger corporations. And, without it, they will simply not survive.

Below is an outline of the restauranteur’s dealings with the insurance company: The restaurant’s policy as it pertains to Business Interruption, specifically:

2. Closure – of the premises by a competent authority due to: a) an outbreak of any notifiable

human infectious or contagious disease at the premises;

 

The wording of the policy was enough to leave the initial policy handler surprised, as most policies categorically do not cover pandemics. However, the restauranteur knew there was a process to go through to establish exactly how the claim would be handled.

 

On waiting patiently for over four weeks to speak to a loss adjuster he then spoke to one on Friday, 24th April. He had a conversation about […]’s

-Annual turnover

-Costs

-When and why the restaurant closed

-How the business has been affected and what the restaurant was doing currently.

 

After all this the restauranteur was told the business was not covered because the wording includes ‘at the premises’.

 


The restauranteur takes issue with this as the restaurant has been ‘closed by a competent authority’ of the highest level: the Government. It is closed because of ‘an outbreak of any notifiable human infectious or contagious diseases’, and the WHO‘s March 11th declaration that Covid-19 is a pandemic, defined as being ‘prevalent over a whole country or the

world’ would by extension quite reasonably include a restaurant that has been forced to close because of its very existence.

 

The restauranteur believes the business is covered quite clearly by its insurance in this instance. The policy does not contain any exceptions such as ‘does not cover pandemics’ as others do.

 

The insurer has argued the restaurant is not covered due to the phrase ‘at the premises’. The owner cannot find anyone who does not think this is an unfair exploitation of ambiguity, in a way that is neither morally nor legally justifiable. He also feels that by asking so many questions and assessing the business state before letting him know he was not covered demonstrates the insurers could have come down on either side of the line, dependent upon the severity of the claim.

 

The latest development in this story is that the insurers are trying to say Covid-19 is a ‘pollution’ and is therefore excluded.

 

We would also highlight that the policy is subject to a General Exclusion for Pollution which is a defined term in the policy as follows:-

 

“Pollution, Contamination, Sooting, Deposition, Impairment with Dust, Chemical Precipitation, Poisoning, Epidemic and Disease (including but not limited to foot and mouth disease), Adulteration, Impurification or Limitation or Prevention of the Use of Objects Posing Hazards to Health”.

 

The presence of COVID-19 may be considered contamination and is a naturally occurring organism.

 

The restauranteur’s expectation is that if he manages to get the insurers to agree Covid-19 is ‘at’ the premises which it is currently using as the reason not to honour the business interruption payment, it will then change the argument to say the business is not covered under the definition of what Covid-19 is.

 

May 2020

 


 

Written evidence submitted anonymously

I am a ltd company where i am the sole employee and i work in the TV commercials sector.

 

I am sure you have been inundated with emails about this so ill keep it brief.

 

No TV commercials are likely to be made for a while even when most people are back at work because generally i work with crews of 50+ on a shoot day. I can’t believe the government will allow this to happen any time soon.

 

I haven't been offered any grants to help me whatsoever, i’ve been forgotten, like many others it would seem. I have had to furlough myself and that amount covers less than half my mortgage (£1045) a month. I take most of my money in dividends which of course i am now not earning. Why haven’t i been given any help whatsoever? I pay cooperation tax, normal full time employees don’t. So you

don't consider dividends to be part of my income? Therefore, moving forward, surely then i should no longer declare or pay tax on any dividends I draw. I should just reclaim all dividend tax I have previously paid, by deducting it from my future corporation tax bills,.

 

Also it makes no sense that the Job Retention Scheme places no cap on full-time employee salaries yet the self-employed are capped at £50K to be entitled to support. So my partner also falls through the cracks.

 

No doubt you will now hike up tax in order to cover the costs of giving out all of these grants but neither myself or my partner have received them but will no doubt have to pay the increase in taxes. It’s so unfair and totally not on.

 

This is just the tip of the ice burg.

 

May 2020

 


 

EIC0163

 

Written evidence submitted anonymously

 

I would be very grateful if you would please look into this matter on my behalf?

 

I am a self-employed musician: This is my only Source of income

 

Submitted self-assessment profit for previous 3 years.

Profit from self-employment 2016/17 = £1.145 Profit from self-employment 2017/18 = £5.948 Profit from self-employment 2018 /19 = £7.338

Total profit from self-employment for the last three submitted years £14.431 Average profit from self-employment for the last three submitted years £4.810.33

80% of average profit from self-employment for the last three submitted years £3.848.26 Divided by 12 = Monthly grant from Government £320.68 X 3 = £962.06


 

The first year 2016/17 of self-employment I was 17 and still in full time education, so had very little opportunity for earnings.

The second year 2017/18 was spent partially in full time education, so limited opportunity for earnings.

 

I therefore feel that it would be unfair and inaccurate for the Government to calculate my 80% grant, based on the average of my submitted last three years profit as a self-employed person. Since the governments forced lockdown, there are no longer any opportunities for me to earn money.

 

May 2020

 


 

Written evidence submitted anonymously

 

I’m writing to you to ask for help as simple as that.

 

I’m self-employed since August 2019 and at the moment neither myself nor my partner ,who is self-employed too, can get any help. We are both out of work since our industries have closed down at the moment. We live in London with our daughter who is 4 years old and our household is getting not help whatsoever. I had been employed for over 20 years and change to self-employed last year and now I find myself without any help which as you can imagine it’s extremely worrying since nobody really knows how long this is going to stay like this and how we will get out of this situation. I could submit a tax review for 2019-2020 but you are not considering that year and by doing so not allowing me to get any help. My partner can’t get any help because you are also basing it not on the actual last year but 2018- 2019 and he cannot get any help. All we want is some help to allow us to survive this situation which as you know is awful for all. If it’s not the illness that kills you, it could be your finances. Please help more people!

 

I’m asking you to re-look at your plan for the self-employed, if you live in London you have London living wages so perhaps you could look at removing the cap on 50K and also why not help everyone at a time like this and include all self-employed even if they only have been in the last 3 months. Again, without this, a whole group of people will be arbitrarily left out altogether.

 

You can only help us at this time so please consider wisely and take your time as I appreciate it’s a complicated system.

 

May 2020

 


 

Written evidence submitted anonymously

 

Small Limited Companies Need Recognition from Government and to be treated fairly and equally and not discriminated against

 

I am 70 years old and own a Public House in […], Oxfordshire . I have worked in the leisure and hospitality sector my entire life, owning my own businesses for over 50 years, during this time I have always employed people, paid VAT, Taxes, Capital Gains tax when I have sold businesses. I have been a Conservative voter and supporter for 50 years, believing this party understand the importance of small businesses and a broad based economy.  Life many people in small businesses I have everything tied up in my business, my life savings, home, livelihood, everything. Many of you may wonder why I am still working at 70, unfortunately my pension was in Equitable Life which as you will be aware collapsed, however I thoroughly enjoy working and work every single day of the week, I average between 50-60 hours work a week 7 days a week.

 

Small rural Public Houses are the hub of our communities, we play a huge part in the social life, health and mental well-being of our communities. We act as job exchange centres, meeting places, support networks and a place of coming together to celebrate national achievements and disappointments. Public Houses have been part of Great British Heritage for hundreds of years and without further support and intervention by Government thousands will close and never reopen for future generations.

 

The Pub and hospitality industry in general have been left in a perilous state. The Government's support package so far has been very welcomed but totally inadequate for our industry as our insurers will not cover for Business Interruption or the losses for perishable stock. as a small rural Public House we have lost £70,000 so far in lost turnover so far and

£9,000 in perishable stock. The majority of us face financial ruin without further sustained support. Loans are not the answer for everyone as many of us do not know how long it will take to rebuild our business as the public have been scared to the extreme not to come out and not to socialise.  For people that have always been paid a salary as as most Ministers and MP's are still receiving full payment , it's possibly hard for you to understand what it must be like to have no income and everything you have invested in, simply decaying, devaluing and disappearing before your eyes. but many of us in Public Houses, face to loose everything and I mean EVERYTHING

 

We personally risk to loose everything our home, business, livelihoods, everything I have worked for for the last 50 years. Not a great prospect at 70 . I have always been a Conservative voter and supporter and believed you understood small businesses.

 

Our industry rural Public Houses has undergone a huge decline with over a quarter closing in the last decade. Our industry is very vulnerable at the best of times.  We have just experienced one of the wettest winters on record, many of us are seasonal and have now missed 7 critical weeks of our season including Easter and May Bank Holidays which is what helps us through slow periods.

 

Self Employed as a Limited Company - we are being discriminated against

 

We were advised by our accountants on purchasing the Freehold of the pub […] to run the business as a Limited Company which we have done for many years. There are tens of

 


thousands of small limited companies that operate in this way. We are not earning fortunes looking for tax avoidance, we are following the advice of accountants to be tax efficient not avoidance. We employ local people, and tradespeople, pay all our taxes and vat and games duty, pay all our licenses, Premises License, Music License etc. Surely the Government must recognise this group of self employed people the same as Partnerships and general self employed have been recognised during this crisis. We are all in the same position and have sacrificed our businesses and livelihoods when we were asked to for the good of the nation.

Small Limited Companies Need Recognition from Government and to be treated fairly and equally and not discriminated against

 

Government Talk of Economy Bouncing Back

 

Government talk of UK economy bouncing back, other Ministers have also expressed this view, Government said they will encourage this in all types of ways. Government recognise that Pubs and hospitality have been one of the hardest hit industries, we were the first to close and possibly last to reopen but as yet we are not being given any indication as to when we can re-open. We ned to know specifically how Government propose to help small rural Public Houses and the Hospitality industry in general, as our industry relies on sociability and faces total collapse without further help. The initial measures and Government Support helped in the first 3 weeks, but totally inadequate there after

 

We need a package of continued help for the next 2 years to get back on feet. We need tax and vat wavered, financial help employing staff, compensation to cover losses in stock and trade.

 

Public Houses individually have paid thousands of pounds in insurance policies but our insurance companies do not want to know??

 

Loans

 

Why should we have to burden ourselves with more debt of a loan to save our businesses that were very viable prior to the virus, and may not be viable after, we just don't know, therefore in conclusion Government have left us in a totally perilous situation. Many Public Houses are not profitable enough to take on further debt and loans and burden ourself even greater.

 

Social Distancing

 

Social distancing for most Public Houses and Hospitality will be impossible, if we can only have a small number of customers in our premises, this will automatically make us

unviable. Will the Government support us through this period with further financial help in order to survive, other wise we may just as well close the door, we would not be able to pay staff or our bills, surely you must understand that?

 

Our small businesses have been left decimated by Government

actions, and our strong economy has been sent into free-fall . The nonsense I keep hearing that the economy will be in strong position to bounce

back, while I am for the power of positive thinking realism is more important than hope. This is going to take years to recover from , we don't want Ministers to sound like very well spoken double glazing sales men trying to

 


sell a line. So many businesses are interconnected that staggered opening program seems crazy to me. Small business need immediate help (not loans) to save our economy and jobs and prevent mass unemployment like never before.

 

At the age of 70 the stress, anxiety, uncertainty and depression that I risk from loosing my business from no fault of my own is unbearable - small rural Public Houses need help and fast. Our Government have and are treating us appalling , it's a total disgrace. It is simply not financially sustainable for us and millions like us to be left without additional major financial support (Not loans)

 

Yours devastated but still hopeful that you will understand the desperate plight we are faced with and offer the support we desperately need

 

[…]

 

We feel small limited companies should be given the same status as other self employed and the same financial package to help during this crisis which so far has not been forthcoming 7 weeks into Lockdown without any trade. Why have small Limited Companies been penalised? (I have also answered some of the questions on Treasury Committee evidence)

 

Self Employed as a Limited Companies

 

We were advised by our accountants on purchasing the Freehold of the pub […] to run the business as a Limited Company which we have done for many years. There are tens of thousands of small limited companies that operate in this way. We are not earning fortunes looking for tax avoidance, we are following the advice of accountants to be tax efficient not avoidance. We employ local people, and tradespeople, pay all our taxes and vat and games duty, pay all our licenses, Premises License, Music License etc. Surely the Government must recognise this group of self employed people the same as Partnerships and general self employed have been recognised during this crisis. We are all in the same position and have sacrificed our businesses and livelihoods when we were asked to for the good of the nation.

Small Limited Companies Need Recognition from Government and to be treated fairly and equally and not discriminated against

Government Actions due to Corona Virus Pandemic - Questions Answered What problems (if any) are individuals facing in claiming support from the Job

Protection Scheme and the Self employment - No support for small Limited Companies

 

Income Support Scheme?

How effective have these schemes been in maintaining employment and reducing job losses? - Maintained employment temporarily but long term not sure with such uncertainty and social distancing measures that will reduce our trade and customer confidence to go out and socialise, all very unknown

Is the Government doing enough to ensure that businesses and individuals are claiming appropriately and that

fraudulent claims are detected?

 


Has the Government struck the right balance between targeting support and making it easy to access? Not enough financial support for Public Houses and Hospitality who have been hardest hit

Where has Government support been too generous and where has it not been generous enough? - Everyone received a grant of £10,000 but in some cases a hairdresser for example by themselves this may have been sufficient for their business to survive but Pubs like ourselves with much greater overheads, turnover paying more tax and

vat and alcohol duty we have received the same and this is totally inadequate for our business to survive. Pubs and restaurants have perishable stock and we were given just hours notice therefore had a cellar full of perishable stock and beer to the value of approximately £9,000 . The stock was all paid for however this will have to be thrown away as it will be out of date. Pubs need much greater support to cover our

losses. Insurance companies are not prepared to cover for loss of stock or business interruption. We pay £5,000 a year on insurance but will not get a penny in compensation. Hair salons or nail bars will not have to throw stock away but have received the same grant as many Pubs

 

How successful has the Government been in plugging the gaps in the schemes? - What gaps in coverage still remain and are changes required to increase their effectiveness? - Nothing for small limited companies and the £10,000 grant, business

rates holiday, is no where near enough for the amount of time we have not been able to trade and huge losses we have made.

How viable is it for the Job Protection Scheme and the Self-employment Income Support Scheme to be open for

longer? - Job Protection needs to be in place to retain jobs, without it mass unemployment

How and when should the Government’s support packages be wound up? - This will depend when business get back to normal trading, all restrictions lifted, most businesses will need help for another 1 to 2 years to get back and avoid mass unemployment

How should the Government prioritise which continuing sectors and groups to support as time goes on and ongoing

support is needed? - Those with restrictions that restrict normal trading and those industries already badly hit and under pressure Pubs, Restaurants, Hotels, Hospitality , Retail Leisure

What actions does the Government need to undertake to pursue to support a successful exit strategy? - Tax, VAT waivered for a period for small businesses , financial help to employ staff and retain staff

Support to businesses and Financial services

How effective is the Coronavirus Corporate Finance Facility, Coronavirus Business Interruption Loan Scheme, and the

Coronavirus Larger Business Interruption Loan Scheme? In particular, are these measures succeeding in preventing

viable businesses from potentially going under during the Coronavirus lockdown? - Not all businesses can afford to burden themselves with more debt in these uncertain times. No one knows when we will get back to normal

How effective has the Government support been so far in terms of coverage and speed?

- Business Grant we received week 6 of no trading not fast enough

What gaps are there for businesses within the schemes? - Small Limited Companies have not been recognised as self employed and are being discriminated against - we need same recognition as other self employed groups- why have Limited Companies

 


been penalised

Is the nancial sector supporting businesses enough? Are businesses getting the right advice on which grants/loans

 

May 2020

 


 

Written evidence submitted anonymously

 

1.       I am one of many self-employed people “falling through the cracks” when it comes to government support during the coronavirus pandemic.

 

2.       Even though I am to all intents and purposes self-employed (i.e. I work for various companies on a casual day-to-day basis with no guarantee of employment), I cannot claim via the Self- employed Income Support Scheme because more than 50% of my annual revenue comes from PAYE work with the BBC. If I am not classed as self-employed then you might reasonably intuit that I must therefore be “employed” and eligible for furlough. Indeed, I am on the BBC’s payroll with the relevant monthly deductions made for income tax and national insurance. The corporation prefers to pay its freelancers in this way and up until now this has never proved to be a problem. However, I, along with hundreds of other BBC freelancers, am now set to be unfairly penalised because of this preference.

 

 

3.       I have been informed that only PAYE freelancers working in the privately funded parts of the corporation can be furloughed on the Job Retention Scheme, while those working regularly in news and sports broadcasting are not eligible because it receives public funding

.

4.       Consequently, all of this means I am not eligible for ANY kind of government support because even though I am effectively self-employed the government will not classify me as such because my main employer chooses to tax its freelance staff at source rather than pay gross (as my other employers do).

 

5.       To compound matters, that main employer IS entitled to furlough PAYE staff (essentially classifying them as “employed”) – but only those working in certain departments. This seems iniquitous for those caught on the wrong side of the divide.

 

 

6.       All BBC departments have reduced output, cut rotas, merged teams, and seen staff cancel holidays – correctly so as it bids to limit the number of people leaving home. The number of available freelance shifts has dropped to almost zero as a result.

 

7.       At the start of this crisis the Chancellor vowed to do “whatever it takes” to support people and claimed “the self-employed have not been forgotten”, but many gaps still exist in the government schemes, leaving me with little or no income for the foreseeable future.

 

8.       It was pleasing to see a degree of flexibility with the decision to extend the cut-off date for the furlough scheme. I now call on the Chancellor to show similar flexibility to support PAYE freelancers, both at the BBC and elsewhere, by adopting the solutions put forward by the Federation of Entertainment Unions. This could be done by creating a new Freelance Worker Income Support Scheme using PAYE data collected by the Treasury or, perhaps more simply, by allowing those who fall below the 50% self-employed threshold to qualify for the Self- employed Income Support Scheme by assessing all income, both PAYE and turnover. The BBC, along with other broadcasters, has already written to the government to give its backing to this second solution. Such a change would allow the many PAYE freelancers currently without an income to follow the government guidance to stay at home to help save lives rather than desperately hunting for work wherever they can find it.

 

May 2020

 


 

Written evidence submitted anonymously

 

Dear Committee,

 

I trust this message finds you well and safe amid the most uncertain time our world has ever known and your team has done a great job in setting up a support framework for businesses that really need it. My problem is that I have seen many business owners frustrated with the banks service which is largely down to a simple lack of qualified and experienced people. Why? Because the likes of RBS let these people (Contractors) go and now are struggling to retrain or re-hire that level of person.

 

I have in excess of 50 people that have the relevant experience and are ready to go on an interim basis. I will take the people onto my books and deploy them on short terms assignments to the various banks. I can be so bold as to say I have people with exact bank experience (Barclays systems experience or RBS systems experience or Lloyds etc etc). This would allow a very quick take on.

 

I want your help, you can advise the banks of this availability and bolster their teams quickly thus increasing the decision rates for our SME markets.

 

My cost will be transparent and very minimal and if done with the compassion needed will be an outright success.

 

The reason for this interest is sparked by the constant news reel regarding the lack of loan progress and SME’s fighting for survival due to the banking sector not having the resource to cope with the demand.

 

We can help but we need your team to assist with getting our message out to the market.

 

May 2020

 


 

Written evidence submitted anonymously

 

My business is a micro business which employs three people. It is a conveyancing property law firm and I work from home. Two employees have been furloughed. Will they have a job to come back to? Probably not, at least not likely this year.

The company is a limited company and I am paid by a small salary and directors loan. I can not furlough as I have ongoing cases, albeit no income will be received as for the most part my clients can not move house at this time. This leaves me with no income at all. I still have business overheads to pay and of course personal overheads. The only thing I have been able to benefit from is a delay in paying my VAT, the VAT money being used now to pay overheads. It is an absolute disgrace that I and thousands of others have been left with nothing but debt.  We should have parity with the self employed schemes or employed schemes available.

The self employed is open to massive abuse. Why can they continue to work and make an income and still obtain 80% of their wages when a director can’t? If the government wants the economy to boom why are they stopping directors from working if they furlough? It is heartbreaking to see others bragging about their additional income and grants for premises when they are not required and others in my position looking into making themselves bankrupt or at worse considering suicide because they feel so desperate. On top of being completely ignored by the Chancellor and basically called a tax dodger and collateral damage, we pay our taxes and collect VAT for the government.

We are strictly monitored by various laws and everything we do is completely legal. I’m sorry to say this regarding the self-employed, but we all know they do not declare all their income, I personally don’t know one self employed person that does, so to zone in a small businesses as targets of ‘well you don’t deserve help because you don’t pay as much tax as everyone else’ is unforgiveable and massively damaging to the economy.

People who were on benefits before the lockdown where given more money, why? Lets face it as living costs go, you don’t need more money. There is nothing to spend it on and nowhere to go. They are sitting at home and have more money than they have ever had or require and once again thousands of others are left with absolutely nothing.

To offer micro businesses more debt in the form of bounce back loans is completely irresponsible. We have had 2 months with no income and there will be a further knock on effect, you are giving us debt to pay debt and get into more debt! Then you have companies that do not need help, bragging about just been given a bounce back loan and wondering what rolex they should buy. It is a joke.

The employees on furlough don’t seem to realise half of them probably won’t have a job to come back to. It is interesting and infuriating to see their responses when they think furlough may be cut to 60%. The comments are along the lines of ‘well I can’t live of that so I’m going back to work’. Try being in my shoes then, because I have been told to live on £0.00 and then give you your job back.

May 2020

 


 

Written evidence submitted anonymously

 

 

The very significant initial government financial support to the economic impact of the coronavirus should be recognised. However due to the speed and impact of the coronavirus crisis it is virtually impossible to consider and provide support in all situations and for all businesses in a relatively short space of time.

 

One of the situations which has been missed or forgotten for important financial support is owner managed small limited companies, particularly where the directors take most or all of their income as dividends.

 

Many of these businesses have lost most or all their income and for various reasons are not eligible to receive income support or grants. My business finds itself in such a position.

 

This seems unfair when compared with for example self-employed people who will receive income support packages.

 

The government has also recently introduced bounce back loans and there are also other loan schemes. Whilst these may be of value to some businesses and some situations, they increase the company’s debt without any certainty as to how and when that debt will be repaid.

 

My request is that the government introduces financial support for owner managed small limited companies equivalent to that being offered to self employed people, and that dividends from these businesses are taken into account when calculating income support.

 

 

May 2020

 


 

EIC0187

 

 

Written evidence submitted anonymously

 

Dear honourable gentleman and ladies,

I find it in bad taste when the country is hurting, when doctors/nurses are going without proper PPE and all keyworkers ,most of the sectors are not following social distance rules are being forced to work that

M.P.s  are being paid an extortionate amount to work from home firstly there should be no travel allowance so you would have saved money there secondly the P.M wants us to come together so the M.Ps should work from home without an allowance as they don’t have to spend time travelling to parliament and any M.P. who doesn’t or refuses should have there pay cut as that is what would happen to me the savings from this could be used in a number of ways.

1)      Giving tax breaks to keyworkers- rewards those forced to work during this and gets rid of the feeling only the rich get tax breaks it also gives some rewards to non nhs workers who do not have any companies helping them)

2)      Use it to buy more PPE for NHS and keyworkers to protect those going to work

3)      Use it to expand the furlough scheme so any keyworker with vulnerable or at risk family members can request to be furloughed at the moment it is only the extremely vulnerable the people at march you claimed vulnerable no longer are ie diabetics, children on ngt,children who have been on oxygen but are off it children who have had spacers in the past

 

 

May 2020

 


 

Written evidence submitted anonymously

 

 

 

Zero help for small company directors

Regarding the lack of support for working company Directors

 

You may have seen the news item on the BBC at 10pm on Saturday 2nd May. Below is another link from the BBC highlighting the same issues.

 

https://www.bbc.com/news/business-52308823

 

If this was not bad enough, as my PAYE is registered at the end of the financial year, i.e. after 19th March, I now qualify for zero assistance/support. I cannot even apply for minimum furlough.

In case that is not clear enough - zero!

 

I asked my accountant to investigate Director furlough arrangements. Here is his reply:

 

We have tried to make the claim, but unfortunately it has not been possible. Recently the CJRS guidance was updated to include a requirement that a 2019/20 RTS payroll submission must have been submitted including any employee for which a claim is made, by 19th March.

 

This causes a problem for annually paid directors who are only paid on a payroll at the end of March. I understand that the ICAEW has raised this with HMRC, but to date HMRC have not indicated any adjustment to the rules. At present it appears that annually paid directors, who were not included on an RTI submission by 19th March, will not be able to participate in the scheme.

 

To me this would appear to be a significant exclusion by the government. I would imagine that there are thousands of people with these circumstances given that many annual payrolls would be run at the end of March.

 

If there are any changes made to the scheme, I will let you know.

 

So now even this suggestion is completely hopeless. No sensible director wants to furlough themselves when they need to work even harder to protect their business. This is a last desperate measure and is still closed to me.

Please can you bring this matter up at the highest level.

 

This has now gone far enough, the government have had time to address the lack of understanding, but they either do not want to, or, worse still, they are ignoring the basic facts.

I have paid my taxes, on time, all my life. Including those of the employees I have supported in the past and looked after for over 25 years. Where is the help for me?

 

Despite having brought this matter to the attention of all of you, I have received no useful response or any acknowledgment of the facts. Who is listening? Who can I contact and how do I get through?? .. hello?? Are you listening?? Who is at the head of this policy?? Put me in touch.

 

1

 


 

Please do not send me a link of the list of help the government has worked up so far. None of it is any good to me unless you think it healthy for me to take on debt!?

 

Why should I need to even consider this if others are well supported?

 

This is an unprecedented crisis. The support from the government for most people is a lifeline. For me there is simply no lifeline.

 

All I ask is for a degree of support at least equal to that offered to others. The way we have been treated so far is shocking and clearly cynical. It demonstrates a serious lack of understanding, disrespect for the work we do, and the role we play as tax collectors for the treasury.

 

Please give me some hope. I have a family and a good business to support.

 

“Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.’ - Winston Churchill

 


 

I thought you may be interested in this response from HM Treasury which unsurprisingly misses the point completely.

I have made my notes in RED, but I fear now that we have been truly fobbed off by people who clearly do not understand the issue.

I have to say that I find it very depressing.

 

From: Petitions: UK Government and Parliament <no-reply@petition.parliament.uk>

Sent: 29 April 2020 00:47

To:

Subject: Government responded to “Coronavirus Support Package for Directors / Shareholders of small Limited Co's.”

 

You’re receiving this email because you signed this petition: “Coronavirus Support Package for Directors / Shareholders of small Limited Co's.”.

 

To unsubscribe from getting emails about this petition: https://petition.parliament.uk/signatures/82070845/unsubscribe?token=G7PN90hMP_gT- Jh_86rK

 

 

Dear […],

 

The Government has responded to the petition you signed – “Coronavirus Support Package for Directors / Shareholders of small Limited Co's.”.

 

Government responded:

 

The Government has announced an unprecedented package of measures to support public services, workers and businesses through Coronavirus, many of which are specifically aimed at small companies. Yes ..

 

 

 

 

 

2

 


The Coronavirus is the biggest threat this country has faced in decades, and the Government recognises the extreme disruption it is having on people’s lives, their businesses, their jobs and the nation’s economy. Yes ..

 

That is why we have announced unprecedented support for public services, workers and businesses to protect against the current economic emergency, including measures specifically for (SOME) small companies,

 

such as:

 

The new 100% backed loan scheme for small businesses. Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government guarantee. Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days. Loans will be interest free for borrowers for the first 12 months, after which interest will be fixed at a low rate. Businesses can apply online through a short and simple form. Ok for those who want to undertake the commitment of borrowing against an unknown future.

 

The Small Business Grant Scheme. Through this scheme, the Government is providing additional funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of

£10,000 per property in receipt of reliefs, to help meet their ongoing business costs. In addition, the Government is granting small businesses in the retail, hospitality or leisure sectors a higher grant of £25,000 per property, for each property that has a rateable value above £15,000 and below £51,000. Not relevant to small companies working from home base.

 

The Coronavirus Business Interruption Loan Scheme. The Government provides lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give them further confidence in continuing to provide finance to viable SMEs. The government will not charge businesses for this guarantee and will also cover the interest costs and fees for the first 12 months. Ok for those who want to undertake the commitment of borrowing against an unknown future.

 

The Statutory Sick Pay Rebate. This will allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because they have been ill with Covid-19 or have had to self-isolate because of it. The Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP. Not relevant to this issue.

 

In addition, the Government has put in place schemes to maintain the links between employees and companies, and support living standards, alongside other changes to the welfare system. Not relevant to the issue. Unless they mean it is easier to apply for income support if your business folds.

 

The Self Employment Income Support Scheme (SEISS) will provide grants to eligible self-employed people, or members of partnerships, worth 80% of their trading profits up to a maximum of £2,500 per month. It is based on income from self-employment or a share in a partnership as reported on a UK income tax self- assessment return. Whilst the government understands that some business owners choose to pay themselves in the form of dividends, under current reporting mechanisms it is not possible for HM Revenue and Customs to distinguish between dividends derived from an individual’s own company and dividends from other sources. HMRC are designing SEISS to require almost no new information from the customer, in order to make it deliverable by early June. Expanding the scope would require HMRC to collect and verify new information which would take longer to deliver and put at risk the other schemes which the government is committed to delivering as quickly as possible. Here we have the issue laid out clear. If we were to be included, it would put the existing schemes at risk! Did I get that right?

 

This is clearly not a fair approach. Self-employed have been offered support (SEISS) but directors cannot access the same scheme as some may have been paid via dividends. I have received minimal dividend payments and it may be that any such payments are excluded, but I would like to have the 80% of my PAYE salary no matter how small, AND be able to continue to support my company and customers the same as the ‘self-employed’ are able to do under the SEISS scheme. This put me in an unfair situation through no fault of

 

 

 

3

 


my own. My PAYE earnings are as easy to verify and collect as anyone. Probably easier than the self- employed...

 

However, those who have incorporated, and receive income from the company as an employee, may benefit from the Coronavirus Jobs Retention Scheme by furloughing themselves from their roles as employee and director of their own company in addition to the other forms of support for small businesses note above. This means that company owner-managers may be eligible for a grant of 80% of the salary they have paid themselves. As above this option is simply not available to me. Even if it was, this is a sure way of slamming the brakes on any Ltd company! It is therefore not a viable option for those of us who want to protect our customers and the companies we have worked hard for. I would like to have the 80% of my PAYE salary AND be able to continue to support my company and customers in the same way as the ‘self-employed’ are now able to do. Even if I could furlough myself this states that ‘I cannot work to gain any revenue for my company’ but only act on the director responsibilities.

 

HM Treasury

 

Click this link to view the response online: https://petition.parliament.uk/petitions/310515?reveal_response=yes

The Petitions Committee will take a look at this petition and its response. They can press the government for action and gather evidence. If this petition reaches 100,000 signatures, the Committee will consider it for a debate.

 

The Committee is made up of 11 MPs, from political parties in government and in opposition. It is entirely independent of the Government. Find out more about the Committee: https://petition.parliament.uk/help#petitions-committee

 

Thanks,

The Petitions team

UK Government and Parliament

 

 

I have a good business. I will be part of the set up that will be needed to bring this country out of recession. Promises of support for new companies is welcome but do not neglect the existing ones. Do not cut off our legs.

 

I am desperate, and feel hopeless, only because no one from the government either acknowledges, or understands the issue. Or worse is ignoring it altogether. If it is not ignorance, then it may be something more disturbing.

 

Clearly, we are not ‘in it together’.

 

For me, under the current schemes on offer, there is literally zero support. This is simply not fair.

 

Regards […]

 

May 2020

 

4

 


 

Written evidence submitted anonymously

 

Falling between the Gaps

 

 

This is very simple really.

 

 

I approached and accepted a new job with a competitor of my existing employer, the Walstead Group. I was very unhappy with my existing employer and had been working for them for 7 years.

 

 

I resigned on February 5th, 2020. I had 3 months’ notice to serve, as I work in sales. Its all part of my contract, and I was placed on Garden leave. I was due to start with my new employer, YM group, on May 6th.

Walstead did all they could to keep me, but my mind was made up. More money cannot buy happiness in your work.

Then the effect of the Virus took effect, and the new employer could not start me on May 6th, and at the time of writing they don’t know when they can start me. They furloughed members of their sales team.

As of May 6th, I am now unemployed with no income for the first time in my life. I started work at 16, and I am now 57.

I asked my previous employer if they could keep me on the books and furlough me but they would not.

I am between a rock and a hard place…..what do I do? There should be support for someone in my position please.

 

 

May 2020

 


 

EIC0197

 

 

 

Written evidence submitted anonymously

CORONAVIRUS SUPPORT FOR BUSINESSES NOT ACCOUNTED FOR

 

My business is based at home offering accounting and taxation services and I ensure all of my clients pay their taxes correctly – even those that don’t think they should!

 

I applaud the Government’s quick response to help for businesses and individuals and can only guess at the huge admin issue this will have been. However, I do feel there are a number of businesses that have been forgotten. A couple of examples of which are below:

 

Example 1

[…] – A business run by […] the director who has worked his socks off to build up his business to enable him to comfortably support his wife and 4 children. He does not have business premises as he does not need any as he is going from job to job in his van. He has worked hard to obtain contracts with chains of hotels and has the contract for […] where he cleans their carpets on a regular basis. He has not been able to work at all and does not run a payroll scheme so could not even furlough himself. His salary package is made up of a minimum salary and then dividends. He was in the process of reevaluating this for the future particularly as his business was growing and he was considering taking on staff as the business grew. He has received no help and has not been able to claim Universal Credit because he had borrowed some money to build an extension just before the crisis so this means he has more than £16k in the bank even though it’s earmarked for the build which he needs so he can look after his disabled mother.

 

Example 2

[…]

Similar situation to above, […] the director had gained some decent contracts at holiday camps such as Butlins in Bognor Regis but has had all contracts put on hold. He is able to do some private households but a lot of these are elderly and they are not keen for him to come to the house even if he is outside. Some of his customers who do allow him to clean their windows are only able to pay in cash which of course is not ideal currently. His wife works and is furloughed but his business can’t claim anything.

 

Example 3

[…]

We employ 4 people and run two offices based at home. We have furloughed two employees but both my fellow director and I can’t furlough as we are very busy doing payrolls and helping clients through this time. We are advising clients to pay their staff and suppliers first if they can afford it. I have been working in my home office since 2007 but didn’t register with my local council as the information available at the time suggested I didn’t need to. Clients do visit me here for meetings.

 

 

 


 

May 2020

 


 

Written evidence submitted anonymously

 

I’m contacting you about the lack of help for the self employed.

 

 

My husband and I are both osteopaths. We run a limited company. Like many other workers we each earn below the 50 k limit for the self employed to get help and yet we are excluded from the provision for the self employed.

 

 

We now have no practically money coming in, we have our domestic outgoings like everyone else, a mortgage etc, and in addition all the overheads including the rent on one of the clinics we work at. This is in the form of a ‘serviced office’ so we cannot claim small business grant, although this is offered in Wales, and, I think, Scotland. Also we cannot get a rent break.

 

Our other clinic is located inside a health centre/gym, which has been closed so we arenot having to pay rent there.

 

That closure resulted in our losing 5days work per week.

 

At the other clinic my husband has 2 days but there are fewer patients coming at the present time and there need to be long gaps between patients to maintain distance and give time for cleaning procedures so my husband has gone from seeing 60 patients per week in total to seeing approx 7 patients.

 

If we can’t pay that rent (and we don’t know how long this will go on for) we will lose those premises and then when this is over where will we work? This rent alone is £1900 per month, we also have other overheads, which together with the rent total about £2,500 per month.

 

We can’t get a small business grant of £10,000 to which other businesses are entitled because we don’t pay rates on our premises. There is no help for us and for others in similar situations.

 

We want to have a business to come back to when this is over, I don’t know how we can do that with the current level of help on offer.

 

This crisis could use up anything we have set aside for retirement just to live on. I was planning to retire at 70 and this crisis could mean I’ll be even older.

 

I can’t understand why we arenot being helped, it would be very simple to look at our income and the tax we have paid and work something out like they have done

 


for other self employed. Or to just offer a grant to help with the running costs which still have to be met.

 

Why do we take dividends? We are not tax dodgers. We pay tax, it can be demonstrated. Each month we don’t know what our income will be. Last April we were both off sick with flu. We earned practically nothing that month. We have to prioritise the fixed costs for the business so we can’t give ourselves a bigger salary. When both clinics are open our fixed costs are in the region of £5,000 per month. We don’t get any help with pensions, holiday pay, sick pay, we often have to use a private GP so as not to interrupt work too much so we use the NHS less. I have always believed in paying tax. Politicians always look for a vote by offering a tax break as if it’s an okay thing to do.

I’ve never voted on the basis of saving money on tax. But when we have a perceived tax break which has come about through the way the system has been set up - and it wasn’t set up by us - we are demonised.

 

IN CONCLUSION we need help in two areas, more help with personal living expenses and help with premises costs for those who are not registered rate payers.

 

 

Please can somebody understand this.

 

May 2020

 


 

Written evidence submitted anonymously

 

I am self-employed but all my contracts are PAYE freelance. This means that the company that hires me gets the benefits associated with PAYE but I do not get any benefits of either being a permanent member of staff or a self-employed person.

 

I have no choice in being paid via PAYE system, if I want the job I have to abide by the hiring company’s rules.

 

Because almost all my self-employed income is via PAYE freelance pay I am not eligible for SEISS. I am also not eligible for Universal Credit and my landlord refuses to accept housing benefit and will not reduce the rent.

 

All the work I had confirmed for March onwards has been cancelled due to Coronavirus. All my future work has also been cancelled due to businesses folding completely due to Coronavirus or because they’ve lost so much money they’re not going to be hiring extra staff like me for the foreseeable future.

 

I have been thrown into poverty in a matter of weeks and I have been given absolutely zero government help, despite paying taxes via the same system as furloughed workers.

 

Will I be expected to pay higher taxes after this crisis to pay for bailing-out the furloughed workers? How is that fair? I’ve lost my livelihood as a result of this crisis and been given no support.

 

HMRC have a very clear record of my earnings and how much tax I’ve paid because as a PAYE freelancer, I am taxed at source. What’s the difference between me and a furloughed worker? I don’t get bailed-out by the government despite being paid in the same way.

 

I will now have to leave my flat, so my landlord will have an empty property for a while and won’t have rent coming in.

 

I’ll have to try to sell as many of my belongings as possible and move in with my parents in Hertfordshire. My partner will have to move to his parents on the Isle of Wight.

 

We are 48 and 44, we’re not kids, we’re senior professionals working in London in specialised fields. We’ll never get on the property ladder now and will need to rely on some kind of state benefit to survive for the next six months to a year, at least. We won’t have money to spend on holidays, restaurants, clothing, food and other items as we used to. If we had money coming in, we would still be contributing to the economy, now we can’t.

 

If the government had treated PAYE freelancers the same way as other PAYE workers we wouldn’t be in this situation.

 

We will not forget what the conservative government has done.

 

May 2020

 


Written evidence submitted anonymously

 

 

FALLEN THROUGH THE CRACKS

 

 

I am a PAYE freelancer in the film and TV industry. My contracts can be for anything from 1 day to 23 weeks. Prior to lockdown I had just finished a 5-day contract for the BBC on Casualty. I was then due to start 23 weeks work for Red Planet on a popular TV series for the BBC. Once I had agreed terms for the Red Planet contract I subsequently had to turn to down two other offers of work as they clashed with the one I had just agreed to – one was for Netflix. So there was plenty of available work around.

 

As a result of the lockdown all work in the sector has either been cancelled or postponed. The lockdown occurred just prior to my contract being due to start, so I was caught between finishing a contract for one company and starting a contract with another company. As the industry has shut down there are no opportunities for employment.

 

Neither of the companies I was contracted with before and after lockdown announcement is in a position to furlough me. I am not self-employed so cannot go down that route for assistance. I applied for Universal Credit in March and am still waiting to hear if I have any entitlement, however as I have a small pension coming in I doubt I will be entitled to UC, even though the amount of pension I receive only covers a small portion of my regular direct debits/standing orders like insurance, council tax, mortgage, gas, electric etc.

 

I manage to earn an average annual income which covers me for any quiet periods when I am not able to get any work. This quiet period for me was during this winter just gone, and I was very much relieved and looking forward to starting the long job with Red Planet, so any ‘savings’ had already been used to see me through the quiet winter period.

 

It seems not a little unfair that there are a lot of people being supported financially by the government and there are those, like myself, who fall between the cracks, and therefore will not be able to assist in kick-starting the economy again as we make those tentative steps easing out of lockdown. As I am PAYE the government has had the benefit of receiving my tax and national insurance contributions immediately rather than having to wait until the end of the tax year. I am sure that post-Covid 19 the tax-payer will be required to re-pay the massive financial cost of the government assistance to many individuals and self-employed people with higher taxes, which I will feel extremely peeved about paying when I have been left out in the cold, after I have been a tax-payer the same as all those people who has been able to receive assistance. I know that life is not always fair, and I would never want free handouts, but come on, if the economy is going to need my help then I also need yours. There a many people in a similar situation both in the TV and Film Industry as well as in other industries.

 

May 2020

 


 

Written evidence submitted anonymously

 

I am a small business owner who has been left out of income support schemes and I urgently need your help.

 

I am a Location Manager and Line Producer working on UK Independent Feature Films and TV shows.

I was advised by my industry to trade as a Limited company around 5 years ago to put myself in a better position for gaining work in the industry. I also take decisions on behalf of the production company with regards to health and safety issues along with supplier and crew contracts that have some obvious liability implications, hence the requirement to be Ltd.

 

My company is […].

I am the sole director of this company and turn over on average 30k per annum. I have a PAYE scheme in place that pays me £719 per month directors salary.

 

The rest of my income is taken in dividends dependant on my profits and with regards to availability of work & the seasonal nature of the film & TV Industry.

Currently furloughed with an income of just £575 per month from the PAYE scheme and with no indication when our Industry will restart to bring back the huge economic and cultural benefits to the economy that it provides.

 

I am supporting the #ForgottenLtd campaign, which represents directors of small limited companies who are not eligible for self-employment income support.

I am asking for the Treasury to reverse this policy and put us on an equal footing with the self-employed.

Many of us don’t qualify for small business grants as we’re not in commercial premises. Taking on debt to support our livelihoods isn’t an option. Without rapid assistance, many of us will go under – costing jobs today and crucially those we could have created in the future.

We are calling on the government to immediately protect our incomes by extending SEISS to encompass small limited company directors based on all income for the last 3 years capped at £2,500. To include PAYE (except where already furloughed), dividends and/or income classed as repayments to a director's loan for companies not in profit.

We would also ask that you:

 

1)      Allow furloughed directors to continue to work to support their businesses

2)      Extend Business Support Grants to all small businesses

 

If risk-takers, innovators, creators, and entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 7.5 million employees?

Please correct these flaws in the support schemes before it is too late for many small business owners, their employees, their suppliers, and their families.

 

 

 

May 2020

 


 

Written evidence submitted anonymously

 

I am a small business owner who has been left out of income support schemes and I need your help.

 

I am a sole director and employee of a consumer electronic brokering company – […] which I set up in 2013.

 

I am supporting the #ForgottenLtd campaign, which represents directors of small limited companies who are not eligible for self-employment income support – a deliberate choice by the Treasury.

 

I am asking for immediate representations to the Treasury to reverse this policy and put us on a equal footing with the self-employed. Many of us don’t qualify for small business grants as we’re not in commercial premises. Taking on debt to support our livelihoods isn’t an option. Without rapid assistance, many of us will go under – costing jobs today and crucially those we could have created in the future.

 

We are calling on the government to immediately:

 

1)  Protect our incomes by extending SEISS to encompass small limited company directors based on all income for the last 3 years capped at £2,500 per month

To include PAYE (except where already furloughed), dividends and/or income classed as repayments to a director's loan for companies not in profit

 

2)  Extend Business Support Grants to all small businesses We need support now to save and sustain our businesses.

 

3)  Allow furloughed directors to continue to work

No one should be forced to abandon their businesses, nor punished for unwittingly undertaking any action that may be deemed fraudulent. We need to be in the strongest position possible to emerge from this crisis intact and to play our part in the country’s economic recovery.

 

If risk-takers, innovators, creators, and entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 7.5 million employees?

 

Please now is the time for the Treasury to correct these flaws in the support schemes before it is too late for many small business owners, their employees, their suppliers and their families.

 

May 2020

 


 

Written evidence submitted anonymously

 

Evidence to demonstrate the problems individuals are facing in claiming support from the Job Protection Scheme

Evidence to support the ineffectiveness of these Schemes

Evidence to support that Government has not been plugging well-publicised gaps in the Job Protection Scheme

 

Executive Summary

 

 

My Evidence

 

1.       After securing the job in January, I started in a new job with a travel company on 24 February 2020. On 7 March, I was advised that my job was ‘at risk’ due to the dramatic impact of C-19 on the travel industry. Shortly after that date the Government launched the Government’s Job Retention Scheme. The company asked me if I would accept being furloughed. As the only regular earner in a family of 4 (2 kids in education), I naturally accepted. At the time of the launch, I was eligible for the Scheme.

 

2.       The Government then extended the date from 28 February to 19 March, purportedly to extend the benefit to more individuals. In doing so, they introduced a requirement for an RTI submission to have been made in respect of an eligible employee before 19 March.

 

3.       As I started too late in the month to be included in February’s payroll, I was paid in March in respect of both February and March. This means, I did not appear on the RTI information until after this new cut-off date and my employer was therefore unable to claim. I have now been made redundant because the company is unable to afford to keep me on.

 

4.       As an HR Director, I can confirm it is common that individuals starting later in the month are paid in arrears as far as their 1st salary payment is concerned. This is especially true when Payroll is outsourced to a 3rd party as is my case.

 

5.       The introduction of this criteria therefore REDUCED the number of people that could access the benefit. The RTI date of 19.3.20 only benefitted those who are weekly paid or were employed in the main during January/early February. Anyone who is monthly paid and started just before/after the 28 February do not qualify.

 

6.       The RTI requirements was deemed to be necessary to avoid fraudulent claims. However, there are numerous ways to verify someone’s eligibility – I have, e.g., a signed and dated Contract of Employment. In fact I think, there are many employers who may be claiming for employees who have been made redundant and not furloughed and so I think this is an inadequate and unhelpful criterion!

 


7.       I have recently learned that I am not alone and have joined the membership of New Starter Justice – an online campaigning group with nearly 10k members. I have also been in contact with my MP (Greg Clark) who claims to support my/our cause. Despite this, the Government continues to ignore me/us or refer us to the fact we can access JSA and UC and/or return with begging bowl to previous employers. I for one, cannot return to a former employer, having spent a couple of months out of work before securing my new job. Besides, if the whole purpose of the Scheme was to protect jobs, this practice is contrary to its aim: former employers are likely to have filled the vacant position and are therefore inflating their payroll costs in the short-term only to let people go once the furlough grants cease. They also suggest that there are winners and losers with any Scheme. Whilst I can accept this, the fact I was in one minute and out the next, just adds insult to injury and smacks of a Scheme that was not thought through.  Just as concerning is the fact that the Government appear not to understand payroll processes. They just don’t seem to grasp that extending the date to 19.3 for new starters and then imposing a deadline of 19.3.20 for the RTI submission is absolute nonsense!

 

8.       Many of the individuals who have been affected by this loophole, are professional people who have chosen to move jobs to progress their careers. This indicates that they are successful, high performers. I for one have progressed my career over 30 years, paid higher- rate tax for much of that period and own my own property (mortgaged) and car. I’m not excessive in my spending but our family costs equate to around £2,500 per month.

 

9.       I do not qualify for UC but I do qualify for contribution-based JSA which is £74.35. Anyone can see that this is a significant shortfall on what I need to cover my monthly expenses. I cannot claim housing benefit or means-tested JSA because my partner works. However, he is self-employed and has not been able to work because he is a painter/decorator and can’t enter people’s homes due to social distancing/lockdown.

 

Summary

 

In conclusion, despite the fact that I was employed prior to 28 February 2020, my role disappeared solely due to C-19, payroll cut-off dates were not within my control, the Government has placed an insurmountable barrier to me, and many others, claiming what they suggested I am entitled to.

 

Solution

 

For the Government to remove March RTI requirement to April and seek other means of verifying eligible claims such as Contract of Employment.

 

May 2020

 


 

Written evidence submitted anonymously

 

 

I am a small business owner who has been left out of income support schemes and I urgently need your help.

My company is […], I am a sole director/employee, I am in project management within construction and property sector, my company registration number is […], this is my 6th year of trading. I do not have premises, therefore no rateable value and no grants are available.

Company Directors have been ignored, vilified, and insulted, the lack of parity of support is discriminatory and unjust, unless it is urgently rectified it will affect the economy of our country for many years to come.

Company Directors have been ignored, vilified, and insulted, the lack of parity of support is discriminatory and unjust, unless it is urgently rectified it will affect the economy of our country for many years to come.

I am supporting the #ForgottenLtd campaign, which represents directors of small limited companies who are not eligible for self-employment income support.

I am asking for the Treasury to reverse this policy and put us on an equal footing with the self-employed.

Many of us don’t qualify for small business grants as we’re not in commercial premises. Taking on debt to support our livelihoods isn’t an option. Without rapid assistance, many of us will go under – costing jobs today and crucially those we could have created in the future.

We are calling on the government to immediately protect our incomes by extending SEISS to encompass small limited company directors based on all income for the last 3 years capped at £2,500. To include PAYE (except where already furloughed), dividends and/or income classed as repayments to a director's loan for companies not in profit.

We would also ask that you:

 

1)  Allow furloughed directors to continue to work to support their businesses

 

2)  Extend Business Support Grants to all small businesses

 

If risk-takers, innovators, creators, and entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 7.5 million employees?


 

Please correct these flaws in the support schemes now, before it is too late for many small business owners, their employees, their suppliers, and their families.

May 2020

 


 

Written evidence submitted anonymously

 

To whom it may concern, I hope you are well.

I’m a freelance TV worker in my late-twenties and after deciding on a change of career direction at the beginning of the year, I had a very quiet beginning of 2020 work-wise, gaining only a week’s worth of work until the end of February when I was delighted to take a role at a company I love- and used to work for in another department. I continued working for them until early April when the decision was made to furlough myself and fellow colleagues at the same mid-junior level.

At the time, I felt very fortunate to be able to receive this support for the government and, it must be said, extremely proud of the way the powers that be were taking responsibility for the people of Britain in this strange time.

However, only last Thursday, I learnt from the firm that handles my company’s payroll that I was ineligible for furlough for a reason completely out of my control. I began my contract on 24th February which means that the company decided my first paycheck would be processed at the end of March to encompass this month and the week I did in February. This, I have since had confirmed by an accountant, is a very normal way for companies to operate their payroll. What it did mean though, is that I was obviously not registered on HMRC payroll via an RTI submission until the end of March since the company pays its employees within the first 6 days of the new month. And, as a result, I wasn’t eligible for the furlough I was scheduled for due to my RTI submission falling after the Government-set date of 20th March, despite starting my job nearly a month before this cut-off date. On top of this, I am ineligible for self-employed furlough due to more than 50% of my ‘self-employed’ income coming from PAYE last year, since I’m still relatively junior. So now I find myself essentially jobless and unsure when I will be able to get another job in TV, which has all but closed down due to this terrible situation.

I am aware the government has made efforts to make furlough more inclusive by moving back the previous RTI deadline from 28th Feb to the 20th March- but I would argue that this new seemingly arbitrary cut-off date is highly unfair on the tens of thousands of people like myself who began jobs in the 2nd half of February and the 1st half of March, before the coronavirus situation had ramped up.

Nevertheless, I am aware that I am one of the lucky ones here. I am in a fortunate position that I do not have children yet. I do not have a mortgage to worry about. I am currently single and therefore do not have to support a partner. But in spite of all this, the government’s decision to deny my right to furlough support during this incredibly tough time is leaving me struggling to pay my rent and my bills. More importantly though, having read stories of others in my situation, it’s genuinely heart-breaking to hear how much difficulty people with many more outgoings and dependents than myself are being put through- and all through no fault of their own. Simply because they decided (or perhaps simply had to) start a new job at this time.

Starting a new job should be seen as something brilliant and exciting- on both the individual and national level. Not only does it represent an individual either starting or continuing to support themselves as they look to either just survive or expand their horizon, but it also contributes to the wider good through taxes paid through every penny this person earns.

However, in this case, it truly feel that the government is penalising people simply for starting a new job at a certain time, and in doing so, they are making survival extremely hard for so many people across Britain. I would argue that it would be only fair for the RTI

 


cut-off date to be extended further from 20th March to the 31st March, so as to allow those who began new jobs late Feb-early March and who are being unfairly denied support through no fault of their own to also be entitled to the generous support that so many workers across Britain have already been given. This would not only provide people in need with much security at this tough time but also provide them with the stimulus to contribute to the economy in the near future, which will no doubt need all the help it can get.

Many thanks for reading my evidence and I wish you all the best with your inquiry- stay well,

 

May 2020

 


 

Written evidence submitted anonymously

 

As a PAYE Freelancer, I'm a music programmer for Television and Radio and take on fixed term contracts that may be extended, such is the nature of the work.

My last contract for Channel 4 ran from […].

With fixed term contracts usually being extended at short notice, this was originally a one month contract which was extended on a month to month basis ending in February.

When you do this kind of work, you always have a reserve of funds, just in case your contract ends, which I did at this point and found out just 2 weeks prior that the contract was ending.

I then sought other work and managed to secure some Producing shifts with BBC Radio […]. I did 2 'shadowing' shifts (these are always unpaid) and was due to start on Monday 23rd March, the day of the lockdown.

The contract was then cancelled as freelancers were not permitted onsite due to Covid-19. As the contract never started, I was not paid, meaning that the BBC could not furlough me.

 

When the JRS was announced, I approached my previous employment agency Handle and asked them if they could rehire me and furlough me,they were extremely empathetic and said that they would like to but their hands were tied because at that point, the guidelines were that I had to have been on the payroll on the 28th February, as my last pay was on the 14th February, I missed the cutoff by 2 weeks.

As advised by Rishi Sunak to many falling through the JRS loopholes, I applied for Universal Credit, only to wait a month and be informed that I am ineligible as my Partner's 80% furloughed income was just above the threshold based on the household income.

 

Since then, the date for JRS has changed to the 19th March, which looks like it helps many, but doesn't highlight the small print about the RTI, meaning many hundreds of thousands are still in the same position, for myself, it actually takes me much further away from the original cutoff date of the 28th February.

 

It has now been 12 weeks since I had any income, of course, I was prepared for a shortfall between contracts, but not prepared for anything like the financial impact of Covid-19. Any financial reserve that I had is now long gone and not being able to claim Universal Credit or any financial help from the Government, despite paying tax my entire working life is really, grossly unfair.

I've always been financially independent, so to have to rely on my partner's furloughed income is a huge blow when everything is usually 50/50. As a private renter, there are no mortagage holidays for us, no deferring of bills, we're using evey penny of his furlough just to keep a roof over our heads.

 

Just yesterday, a friend of mine in the same position as me shared a response that he received from Rishi in regards to the JRS, as below:

 


 

 

 

The main point I would like to highlight is below:

 


 

 

If I'm right in what I'm reading, the letter states that 'if someone was on payroll before the 28th February and left for any reason it is perfectly possible for them to ask their old employer to take them back and to be furloughed.'

As per the letter, I was on the payroll before the 28th February, so can I be furloughed? My previous employer want to do so but it's so very confusing as this goes against the guidelines as per the website they are following as below:


 

This states that I had to have been employed on the 28th February and is not in line with Rishi's letter.

 

At this point, I'm really at a loss as to what to do, my previous employer want to help me but their hands are tied and the guidelines come with so many caveats and confusing information.

As per Rishi's letter, he expects Employers to do the right thing, mine want to but cannot due to current guidelines which goes against what is stated date wise in Rishi's letter.

With the media industries being hit hard by the pandemic, I very much doubt that I'll be able to get any other work for the foreseeable future, so am looking at jobs in other areas at a much lower wage than previously just so I can get back to work, however in the meantime, surviving on 0% of my usual wage as a tax payer my entire working life is really nothing short of madness.

I'm not a fraud or collateral as Steve Barclay so eloquently put it last week, my PAYE tax payments are registered with HMRC, so why can't this be used as proof that I have been employed and paid my taxes to be eligible?

 

So, my question is, knowing the above information, can my previous employer rehire and furlough me under the current guidelines?

If not, then what other help is available or when will the guidelines be changed to help myself and many thousands of others that fall through the loophole?

 

May 2020

 


 

EIC0238

 

 

 

 

 

Written evidence submitted anonymously

 

 

Re: Closure of […] Restaurant’s

 

This is to confirm that it is with great regret that the […] have made the difficult decision to close all of its London restaurants effective 17th  March 2020, until further notice.

 

Under the circumstances and following the Government’s announcement that no-one should be going to Bars, Clubs, Theatres or Restaurants, this move was becoming increasingly inevitable. Crucially as the virus transmission increased, we needed to put the health and safety of our staff and customers at the forefront of our decision making.

 

This information is given in the strictest of confidence, without liability.

 

May 2020

 


 

Written evidence submitted anonymously

 

Job Protection Scheme and Self-employment Income Support Scheme

 

         How effective have these schemes been in maintaining employment and reducing job losses?

         Based upon feedback from our SME client base, effective through furlough

         Is the Government doing enough to ensure that businesses and individuals are claiming appropriately and that fraudulent claims are detected? Impossible to answer

         Has the Government struck the right balance between targeting support and making it easy to access?

         There are a lot of gaps/circumstances being missed, business is rarely Black/white

         Where has Government support been too generous and where has it not been generous enough?

         The balance seems about right, however this is time dependent. If the support is not offered in the longer run, the cost of failed business will still be borne by the Taxpayer through Unemployment benefit/Universal credit/Council tax Reliefs and lost revenue to HMRC etc

         How successful has the Government been in plugging the gaps in the schemes? Although responsive, there are still gaps

         What gaps in coverage still remain and are changes required to increase their effectiveness?

         My business is typical of tens of thousands and is not offered any small business grant. I work from an office in the Garden. I am Owner/Manager domestic rates only, therefore no grants available. Business Income for March and April 2020 dropped by 95% and is unsustainable in the medium term. The small Grants of up to £10,000 should be opened to all the businesses working from home.

         How viable is it for the Job Protection Scheme and the Self-employment Income Support Scheme to be open for longer?

         That is dependent upon Lockdown and return to work conditions, as long as work cannot proceed, you need support. I am mindful that this cost all has to be borne by the Taxpayer eventually

         How and when should the Government’s support packages be wound up? When all business can return to work. Phased reduction over a 1 or 2 month period to allow planning.

         How should the Government prioritise which continuing sectors and groups to support as time goes on and ongoing support is needed?

         Which groups of businesses will have the greatest/cost benefit? Psychologically you need to see retail back to normal, people in the High Street again, pubs and restaurants, but these sectors also present greatest health risk. What is the financial impact of the different sectors, which sectors provide greatest trickle down economic benefit ? your researchers/HMRC must have data ?

         What actions does the Government need to undertake to pursue to support a successful exit strategy?

         Weigh the long term more, although support measures are expensive to the taxpayer, premature resumption will be even more expensive. Consult with the opposition, try and agree some non party political positions. Crystal Clear communication about “what , why and when. Make clear that the cost has to be borne by taxpayers, because not raising taxes would be irresponsible.

 

Support to businesses and Financial services

 

         How effective is the Coronavirus Corporate Finance Facility, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Larger Business Interruption Loan Scheme? In particular, are these measures succeeding in preventing viable businesses from potentially going under during the Coronavirus lockdown?

         Only experience us with CBILS which has been ineffective because of the time to process by the banks. Banks fear bad debt and don’t have the credit trained staff to be able to assess the volume of applications

         How effective has the Government support been so far in terms of coverage and speed?

         The support has been offered but banks and lenders are slow to implement as stated above

         What gaps are there for businesses within the schemes? Priv Ltd co. working from home get little support

         Is the financial sector supporting businesses enough? Are businesses getting the right advice on which grants/loans to access?

 


         As a member of the NACFB, we are unable to charge clients and prospective for any guidance on these matters. Who pays our costs ? As a business we have no income in the current climate but can’t furlough myself because of our FCA obligations . The banks don’t have the trained staff and are not impartial

         What are the financial regulators and the financial sector doing to reduce the risk of people being taken advantage of by fraud at this time, in particular with regard to vulnerable groups? FCA has published guidelines and the NACFB has set out a position for it’s members

 

Other government intervention

 

         Should the Government intervene more actively in redeploying staff and resources to certain sectors of the economy (health/food delivery)?

         No, tell the private sector what is needed within food/health and let them deliver to specification

         Should the Government intervene more actively in terms of state aid, bail-outs and its industrial strategy?

         That’s Cost/benefit analysis. Taking account of the financial impact of failure over the medium term, what is the short term cost ? Society can’t afford for the major banks to fail, they underpin the movement of money/goods/services. You can afford to see a couple of smaller bank’s lenders fail, it’s a healthy warning to others. The same is true of the Insurance industry which must be at risk from the pending claims. Outside financial services, it’s the economic impact assessment against the concept that business cannot be allowed to fail.

 

Economy, public finances and monetary policy

 

         What economic challenges may arise as the public health and social distancing policies are lifted and the economy begins to recover? What preparations can be made to manage these challenges? For example, could there be difficulty in restarting sectors of the economy quickly, a risk of a spike in inflation, or pressure on the UK balance of payments?

         Business insolvency will materialise resulting in job losses and bad debt in the financial system. BoE to ensure Capital Adequacy in the banks. Credit appetite will therefore be reduced in the lenders at a time when the economy has a greater need, consider extending COBILS. The risk of a spike in inflation is in my opinion, not great, raw materials, fuels, supply prices have dropped significantly.

         Is the economy’s recovery likely to be shallow or sharp? With the right financial support, sharp after a slow start. Pent up demand and the desire of business to off load existing stocks with create discounting which will attract buyers and keep pressure downward on inflation.

o        How long is the shock likely to last? – until Christmas, people will want relief from misery!

o        Which sectors are likely to be impacted by economic scarring? Retail – people are getting used to buying more online

o        Which sectors are doing best? Online retailers and associated transport and distribution

         What will be the economic impacts of the coronavirus outbreak and the social distancing measures in terms of sectors and regions and how temporary/permanent will they be? No comment

         What will be the impact on inequalities within society and how should the Government address inequalities that may have been exacerbated by the crisis? Those that have savings and lower debts have been better placed to manage but if you have saved more than £16,000 you get no support even if your income is £0. Is this policy called “punish the prudent ?” The long term solution is education about money which does not currently happen in the school curriculum. Inequality can only be addressed in the long term by education

         What will be the impact on the public finances?

o        What are the potential future implications for tax and spending? Taxes have to rise, everyone knows that, just come out and say it clearly, with an explanation and a strategy. Conversely spending has to fall. HS2 and Heathrow ? Really ? Massive cost and massive economic disruption

o        What are the implications for the Government’s “levelling up” agenda announced in the Budget/infrastructure strategy? Too big a topic to comment in short form

 


         What will be the impact of high levels of Government debt on market interest rates, private investment, capital formation and future productivity? Rates will be driven up. Government chasing debt providers and having to pay more. Private investment will always follow market opportunity and insolvency creates opportunity. The CV scenario has also created oppotyunity for productivity improvements from home working. But that will take time

         What has and will be the impact on global growth and what shape is the international recovery likely to take? No comment

o        Are there international examples of economic policymaking that we can use?

o        How is the UK Government co-ordinating with other governments to boost global growth?

o        How are countries coordinating their efforts to assist the global recovery?

         What will be the impact of the outbreak on the Government’s economic, customs and financial sector priorities in its negotiations with the European Union? No comment

         What are the differences and similarities between this shock and the Great Financial Recession of 2008 and also the economic demand management and demand suppression policies pursued during the Second World War? What lessons can be learnt from these past shocks and the recoveries that ensued? No comment

         What are the lessons that society can learn for the future e.g. reducing carbon emissions, increased home working, business resilience? The CV shock has produced massive environmental benefits and the potential to create permanent change to our travel and working patterns, with the accompanying benefits to the environment. Those changes will also affect quality of life and work/life balance for millions and properly managed by business, these will produce long term economic benefit. This opportunity should not be lost by the government. Introduce Air Travel tax after an annual allowance, measures to accelerate for electric aircraft engines, ban by statute, any packaging that is not recyclable with effect from 01-06-21. Legislation spurs innovation, industry won’t change without a legal push.

 

 

         Finally, let the government be upfront about the cost of Covid 19 and the need for taxes to rise. Clear communication with an explanation of the figures will gain the (grudging) support of the public. It’s not the message, it’s how it is delivered that wins support.

 

 

 

May 2020

 


 

 

 

Written evidence submitted anonymously

The forgotten Facts about me

asked to pay!

May 2020

 


 

 

Written evidence submitted anonymously

 

I am a current Postgraduate Architecture student at Oxford Brookes University.

 

Like many others I have been severely impacted by the Coronavirus pandemic and consider that I have a balanced understanding of the current situation. However, while I am receiving online tutorials I have no access to the essential, specialist facilities required for my course. Specifically no access to workshops and equipment (for example; laser cutters, large scale printing, CNC machinery, photography suite, 3D printing, specialist software). I am aware that our university has enabled students to have online access to their library however, for my Architecture Master’s I am severely disadvantaged in the work I can produce and this will impact on my future.

 

I have undertaken a student loan to cover tuition fees and access to these specialist facilities which I am no longer receiving. To qualify as an Architect I have a significant student debt and whilst I was prepared to face some hard ship in order to return to university for my Master’s I consider it wholly unfair if I am to pay the full amount of tuition fees for something I am not receiving.

 

Furthermore, I along with many other students, feel that the lack of a standardised response from all universities about ending accommodation contracts early, placed significant pressures and anxiety on students at a time when many are suffering financial hardship and trying to manage exams etc.

 

I don’t think it should be up to individual students to fight for their own case against their university to receive fair treatment and the service that we are paying for.

 

May 2020

 


 

 

 

Written evidence submitted anonymously

 

Dear The Treasury Committee,

I’ll keep this brief as I’m sure you’re overwhelmed with people crying for some help, especially those in Ltd Companies.

I run a cat sitting business and my income has reduced by 100% due to Coronavirus and lockdown. I feed people’s cats when they’re away, so clearly when no one is away then I don’t have any work. Last April I did about 500 visits at £12 per visit, this April was zero. Same so far for May.

The government’s offer of furlough for the PAYE element works out to about £550 per month, my basic living costs before spending anything on food are about £2,500 per month in mortgage, bills and child maintenance payments. I live on my own as I’m separated from my children’s mother, so my income is the only income. I am now at the point of starving myself as much as I can get away with, suffice it to say I’m trying to spend as little as possible.

That leaves a shortfall of approx. £2,000 per month, and I’ve used all my savings already – I’m not a fat cat, I’m a cat sitter who paid myself about £42,000 last year in PAYE and dividends.

I could take a mortgage holiday and I could take a bounce-back loan. The former would cost me in excess of £4,000 over the remaining term of my mortgage in additional interest, the latter would also cost me interest.

Why is there no help for Ltd Co. Directors? I know it was a conscious decision by the government, it’s a disgrace and won’t be forgotten by the couple of million of us who’ve been shafted. I’ll be tens of thousands in debt by the end of this, bankrupt.

 

 

May 2020

 


 

Written evidence submitted anonymously

 

I am a small business owner who has been left out of income support schemes and I urgently need help.

 

I run a small Limited Company, and am self-employed in all but name.

 

I started this company from scratch a decade ago, leaving the security of employment to create my own future.

 

I have worked hard and long for these 10 years to create a successful business. For the first few years I worked 80+ hour weeks.

I made my way through the 2008 financial crisis, and came out the other end.

 

My business generates over £50,000 a year in VAT, pays £10,000-20,000 in corporation tax, yet now when my turnover has dropped to virtually zero overnight, I am not eligible for any support

 

Had my business been established as a sole trader, I would be eligible for the SEISS scheme, and I would survive.

 

Now, I may not.

 

I have never been in debt, the company has never had a loan, nor even an overdraft.

 

I am asking for the Treasury to reverse this policy and put us on an equal footing with the self- employed.

 

That way my company will survive and I can continue to generate the money I do for Treasury/HMG

 

The alternative for me, is Universal Credit, which will not begin to cover my living costs and I will go bankrupt and everything that comes with that.

 

Losing my home is a real possibility

 

If risk-takers, innovators, creators, and entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 7.5 million employees?

 

Please correct these flaws in the support scheme.

 

May 2020

 


 

Written evidence submitted anonymously

Background

We are a video production company based in […] that was formed by myself during the height of Brexit in 2018. The company's only member of staff is myself, the director. The company was growing and whilst didn’t turn over massive substantial amounts in the first two years (due to being new to area and not knowing any clients, and not having a showreel we could show due to being compliant with copyright, even though have over 2000 videos I have worked on in previous jobs), this year we were looking at turning over

£200,000 before Covid19. We were also looking to move into a premise and employ 4-5 people. Set up as a ltd, on advice of an accountant, and certain clients required us to be a limited company and also wanted to keep the company assets separate to personal assets. I take small salary as couldn’t guarantee when the company would have money to pay more, and take remaining personal income from dividends from the company - not through other investment sources.

Job Protection Scheme (JPS) / Self-employment income Support Scheme (SEiSS

As a limited company director, I can’t furlough myself, as I still need to answer customer enquiries, had a small amount of work in which whilst not as much income as the furlough payment, it is more important for the business in the long term. I think it’s more important to be able to carry on marketing for the future than to take a small payment of £550 from Furlough.

I am not eligible for the Seiss, but the contractors I have paid and helped increase their profits form work I have found for them have benefitted from this.

I find it outrageous that limited company directors have been paired with the words ‘tax dodgers and fraudulent’ including by MPs - and even by Rishi Sunak, when all I have done is act compliantly and legally. This is a deep blow when you see so many are able to be better off due to Covid 19. For example the self employed who had extra time to complete the self assessment - giving time to fiddle accounts to get the best from the grants offered. Also have heard of employed staff who this year took a pay cut but because furlough is based on last 3 years salaries are actually now on a higher wage on furlough. It is also hard to swallow that I can’t get any help or if I furlough I can’t carry on working yet the self employed (which I thought I was for many other government purposes, seemingly when it suits, and mortgage applications) can get a grant and carry on working. There is no fairness in the schemes. It

 


seems to me that the government was too generous, offering to pay everyone’s salary at 80% up to £2500, but forgot so many. The packages should have all been announced at same time, and maybe so no one was ‘left behind’. I can’t apply for a grant for a premises, as I have worked from coworking spaces and recently moved to work from home so I could save to employ staff and move into a premises.

There are many gaps not plugged including 2 million limited company directors who collectively employ 14 million people, many of these people will not have businesses to return to. It is not viable for either the JPS or SEISS to be carried on without supporting the directors of the companies/self employed with less than 1 year of accounts/ new employed starters are forgotten. There should have been a basic standard allowance for every adult based on age / living arrangements. This might have been less than the £2500 per month but it would have ensured that everyone is supported fairly. The government MUST prioritise the limited company directors NOW as leaving us to fall through the cracks will no doubt result in millions of unemployment and mental health related deaths. Offering loans is just a debt for many people who have worked hard day and night to offer support to so many employed staff. These directors are the backbone of the country, and not only that have been the ones to take risks in setting up a company, which ultimately will end up paying more in tax. (Whilst tax rates are slightly lower - I am sure the amount of corporation tax that is paid by every company is a considerable amount of total UK tax income, and also it is not to be forgotten that these companies have employed millions of people who have paid tax, without these entrepreneurs creating work, there would be a higher level of unemployment and less people paying other employment related taxes.

Support to businesses and Financial services

Whilst many have applied for CBILS and the Bounce back loan, this is not parity for the limited company directors, as others are effectively getting grants

/ free money. Debt is not the answer for many.

My business, if it can keep going, will help market many other businesses and charities to help them grow and bounce back organically.

My business has protected it’s freelancers, and clients by not filming over this period, but we will be more likely to film and be close to people, if we are not given the same financial support as many others. Many companies (like event providers) will not be able to bounce back, and return to work any time soon due to social distancing.

 


It is clear that the government did not plan for Covid19, and when it did start to act, only acted in haste, but not thoroughly thought out. This is why the UK has high death rates, and companies are crashing. I hope there is a thorough investigation in to the failings, and why so many other countries are out performing (with particular attention to how New Zealand have handled everything)

May 2020

 


 

Written evidence submitted anonymously

 

I am self employed person working in the live entertainment industry, particularly theatre, I help create costumes and bring designs to life.

I feel that the government has considered us up to a point. I am able to claim through the HMRC the financial aid for the allocated period but will it continue?

On a personal level, and as an industry, we need the continued support. Live theatre is, along with restaurants and cinemas, going to be the last area of employment able to open up after lockdown is relaxed. Having a socially distanced audience isn’t financially viable for most theatres and a vast amount of tickets are usually sold to tourists or group bookings of senior citizens none of whom are going to be buying tickets and rushing to the theatre any time soon. Without an audience there’s no income to create theatre.

No theatre means no work for me. I don’t have a spouse or partner I can look to for money to help me out in this situation, I am flying solo here as many of my peers are too.

Prior to lockdown a lot of us skilled professionals had work booked in until the end of the year and with those words “theatres must shutdown” in an instant we watched it all disappear with no idea where the next paycheque may come from or when we might see it.

Live events employees all have a wealth of valuable, transferable skills but many large companies and potential employers look at our cvs and aren’t interested, they don’t see that we’re highly organised, work efficiently, are strong and personable individuals, so it’s hard to find employment elsewhere and if the current financial assistance stops then we have nothing. Our bills can’t be paid, we may become homeless, mental health deteriorates, it’s leaving us in a very vulnerable position.

We probably won’t have any work until early 2021when it is rumoured that there’s a possibility theatre may be able to be staged again. Many small theatres will have gone into administration or closed completely by then, they won’t be able to reemploy their staff, and the time between then and now for everyone in my industry is looking very bleak indeed. I really think the government needs to look at extending the financial assistance for self employed and contracted workers in the live events category. We all want to get back to work as soon as it is safe to do so but if the theatre owners and producers can’t stage live theatre then we have no work to go to.

 

May 2020

 


 

 

Written evidence submitted anonymously

 

I am writing to you to you to express my utmost dismay as to the totally inequitable manner that incorporated self-employed persons such as myself are being treated in the Government’s current business support package made available during the Coronavirus crisis.

I ask you, as my Member for Parliament, to review my letter and provide me with any support you are able to in getting this state of affairs a fair hearing by our Government.

Firstly, I would like to assure you that I am not complaining just “for the sake of it” or to make some ill-informed politically biased view. I understand that these are unprecedented times and I actually support the principle of the government’s general approach to the crisis, recognising the extent to which they have worked to provide support for businesses and workers. However, I have to report that the group which I am a part of, single entity self-employed who have a formed Limited Company, are not being treated with any sort of reasonable equanimity. I would like to take this opportunity to provide you with the reasons why I believe this to be the case.

First a little background to my circumstances:

Now, with regard to work opportunities:

Having explained my circumstance, I shall point out the lack if equanimity I feel applies by reference to the Governments response to the Petition: Coronavirus Support Package for Directors / Shareholders of small Limited Co's. I am making personal comments about my position, however I believe many of the points will apply to similar self-employed limited companies.

 


 

 

 

In the government’s response (email received 29th April 2020) to the petition it says (paraphrased):

(Note Government responses in standard text, my comments in bold italics).

 

  • Many of the measures in the package of measures to support public services, worked and businesses was specifically aimed at small companies.

 

I can only agree with this general statement.

  • Provision of 100% backed loan (interest free for 12 months).

 

My company has sufficient funds to “ride out” the next 6 months or so. Given the lack of clarity about the future for my company I am not prepared to build up any unnecessary debts.

Therefore. in my circumstances the loan offers me no advantage.

  • Small Business grant scheme relating to rates.

 

I work from home, so this is not applicable to me, so far as I understand.

  • Provision of Statutory Sick pay rebate.

 

Since I have had to furlough myself, I do not see that even if I were to get sick this is of any benefit to me.

  • Provision of SEISS for eligible self-employed: 80% of trading profits up to £2500 per month.

 

As a Limited Company this is not available to me. Herein lies some of the greatest inequities embedded in the Governments arrangements.

 

Had I been a sole trader I would probably have been able to claim £2500 per month

Not only that, I would have been able to continue trading (or working for now and for the future) without losing any of that income support.

  • States it is not possible to distinguish between dividends derived from an individual’s own company or those from other sources. Expanding the scope would require HMRC to collect and verify new information which would take longer to deliver and put at risk the other schemes which the government is committed to delivering as quickly as possible. Those self-employed who have Incorporated can furlough themselves and be eligible for 80% of their Salary.

 

I have furloughed myself and will receive around £500 per month because it is based on salary and does not take account of dividends.

 

Further, because the only option open to me was to furlough, I cannot do ANY work during the applicable time (aside from legally required company duties). This includes work for the future that will not even result in income during the crisis period.

 


 

 

 

Now for comparison the owner of company having one owner Director (the owner) and two employees, is, so far as I can see, able to put two workers on furlough, but continue to generate revenue by working themselves.

So, bearing in mind that my workstream has dried up, I am in a no win position when comparing myself to the benefits being provided to virtually every other stakeholder group. If I do any work, even it is minimal current support to clients or for the interests of the future of the company, I cannot claim any support. In contrast a sole trader with a similar general trading profile can not only claim significantly more support but can continue to work normally. That is generate normal income and receive support of around £2500 per month.

Some will argue that by forming as Limited Company I have paid less tax/national insurance than a comparable sole trader. I would address this by saying that my main motivation for forming a limited company was for company profile reasons, not to avoid paying taxes. I accept that I will have paid less tax and National Insurance as a Director of a limited company, so accept that I cannot draw a direct comparison between respective payments. But, to prevent me to do any work for the future or limited work right now seems highly penal and frankly is jeopardising the future of the company. Should I fail to survive I may then become a future burden on the States resources.

I would propose the following to provide some element of equanimity the self-employed limited company:

I appreciate these are busy times for you and your colleagues, however I would ask you to give some consideration to the case I have made and take whatever action you can to support my case.

I look forward to your response.

May 2020

 


 

 

Written evidence submitted anonymously

 

Job Protection Scheme and Self-employment Support Scheme

 

My consultancy works to help start-ups and SME’s survive, thrive and scale creating more tax revenues for the Government and employment opportunities.

 

As all of our clients were in the hospitality/creative sectors our income ceased when full lockdown started.

 

We do not qualify for JPS or SEISS. As an administrative aid we take our remuneration in Dividends. Consequently, we do not qualify for SEISS. We have no premises and obviously cannot furlough ourselves as our income is deemed to be nil. Our profits over the past 5 years have never breached £50k. After a serious illness a few years ago my wife took her small pension as an annuity, consequently the amount available to us via U/C would be

£34.51 per month in total.

 

The actual benefit to us financially in taking dividend remuneration when it is available to be taken is, after all other taxes are taken into consideration, just over £12 a week. This is more than eaten up by the admin costs of being registered as a Limited Company. We have no investment Dividend income. So, paying ourselves via dividends actually costs us money, but saves us a lot of time.

 

I have no access to any Government schemes unless I apply for a Bounce Back Loan which will put a lot of debt onto my balance sheet. As I am one of the registered ‘extremely vulnerable’ I am loathe to access this money as I have no clear indication when I will be able to leave my house and work again. It might be years. My accountant has advised that unlike the SEISS and furlough schemes this money cannot be used to keep body and soul together and it seems that if the money is used for anything other than the specified uses the tax applied will be somewhere between 7.5 and 32.5%.

 

From what I know all the Government schemes are based on a claim being made and HMRC clawback being enshrined if incorrect claims are made, as with annual accounts. Apart from the part/whole self-Dividend paying small business owners who seem to be not trusted to do this and are consequently excluded from the help given to their employees (furlough) and the other self-employed (SEISS). There has been much publicity around this matter, and it seems a tiny proportion of the excluded get investment income. And of those that do the average annual revenue seems to be around £30.

 

Despite a huge campaign to raise the issue of this exclusion, the Government’s position remains that we are not to be trusted, are tax dodging fraudsters despite all cash benefit for smaller businesses being reduced over the years so that, as for me, the only benefit is admin simplicity in a highly variable income business.

 

It is clear (to me anyway) that the failure to treat people like me equally will inevitably result in thousands of business failures and millions of job losses as owners give up and make their furloughed staff redundant. The SEISS offers 3 months at a MAXIMUM of £2500 a month,

 


 

which, in the context of the scale of the business closures and forthcoming redundancies to come, feels like an achingly small amount to pay given the amount of largesse given to multi-billion pound businesses. The Chancellor could, by allowing people like me into the SEISS, with personal and accountant certified statement of any investment income, save a swathe of hard fought for small businesses and the jobs of millions of people.

 

I feel that the above suggestion is actually the biggest ‘bang for its bucks’ the Chancellor could get. I don’t understand why this (clearly) Treasury totemic issue around dividends is being allowed to wipe out the very businesses we hear are going to be needed to drive the economy out of depression and re-build the tax base of the economy.

 

Support to businesses and Financial services

 

None of the major finance schemes are applicable to me as a small business owner (<£50k profits).

 

I did, in the early days discuss the blizzard of schemes that came out ,but my accountant and bank stated I wouldn’t be eligible for any of them.

 

Other government intervention

 

It feels that our excellent military could have been used more and earlier.

 

The Government has intervened at an unprecedented level. The disappointment is that, people like me - and there are maybe 2 million of us -who play by the rules, pay our taxes – dividend/PAYE/Corporation – have been the ones to have been made some sort of example of for using a HMRC approved scheme that doesn’t really save us any money any more.

We’re not Philip Green – we make <£50k profits!

 

Economy, public finances and monetary policy

 

My main observation business – wise is that the policy of excluding small business Directors from support at this time will mean that a section of todays business base will not be around to take up the slack. This will affect the capacity of parts of the economy to start quickly and the inevitable huge amount of redundant people will be a drain on the public finances for more time that is actually necessary. Their jobs can be saved as detailed above. The hardworking entrepreneurs are unlikely to return to ‘business’ after this treatment.

Many feel that the Government is creating a hostile environment for entrepreneurs and small businesses. If my business fails I won’t work for myself again. The Government needs to consider whether they are actually going to have schemes to encourage new start-ups. It is hard enough to get a business off the grounds now. Long hours, stress and often having to put the family home up as collateral to access finance. Many are now thinking, given the hostile environment evolving, why would you bother? Increasingly many feel that’s a fair question.

 

Elements of the economy should recover quickly – construction, transport, manufacturing but the economy is going to have some heavy lifting to do to support the unemployed, both

 


 

the unavoidable and avoidable. That’s an awful lot of avoidable spending power taken out of the economy on the back of a Treasury Totem.

 

Inequalities. Nearly 60% of the business of serious risk of failing due to the lack of support are female owned ad run. In addition there is, particularly in FMCG, a preponderance of BAME entrepreneurs. This will cause the Government serious presentational issue as the reviews of actions taken in this pandemic take place. Not a good look to be discriminating against women and the AME community at any time.

 

I feel that there will be a surge to home-working initially but that will crumble relatively quickly owing to both employer concern over productivity in non IT sectors and worker loneliness.

 

May 2020

 


 

 

Written evidence submitted anonymously

 

I would like to thank the Treasury Select Committee for pushing the government on the ‘hard edges’ of the various Coronavirus support packages that have been introduced so far.

 

I’ll start my evidence submission with a summary of my business and the economic impact that Coronavirus has had on it, followed by:

 

 

My Business and the economic impact of Coronavirus

I work as a designer in the book publishing industry. The spring and summer are usually one of my busiest periods – always a big push to get books off to the printers for the high value autumn and Christmas markets – but this year my work had completely dried up by the end of February. The knock-on effect, not just of bookshop closures but also shutdowns of book wholesalers, warehousing and distribution, is already impacting publishing schedules and, thus, everyone else along the supply chain. This impact will be long-term. Although, work does continue in the industry, publishing programmes are being re-jigged and scaled back – in the present, new titles can’t be marketed or sold effectively; over the coming months publishers can’t risk over-saturating the market with new books once restrictions ease.

 

As a timely illustration of the impact on the publishing industry, The Bookseller reports today (7 May) that small independent publishers fear being ‘wiped out’ by September (https://www.thebookseller.com/news/small-presses-fear-being-wiped-out-autumn- 1202281?utm_source=Adestra&utm_medium=email&utm_term=&utm_content=&utm_campaign= Morning%20Briefing%20-%20070520). These are Small Limited Companies like myself who are falling through the cracks of support. Small businesses that provide work for so many freelancers: editors, proof-readers, indexers and designers … my client base includes small Indie presses as well as larger publishers. In recent years print sales have up year on year, more indie bookshops opening but now, across the board, there are fears of print sales being down 75%.

 

My business is a good example of the lack of parity between how Small Limited Company Directors and self-employed sole traders are currently being treated. I set up as a limited company primarily because of the protection offered by the limited liability. But many of my friends doing the same job as me are self-employed sole-traders. We work for the same clients, have similar incomes (and publishing is not an especially highly-paid industry) and similar ongoing costs. Yet I, having furloughed myself, can claim support for only 80% of my small PAYE, with my dividends – ¾ of my usual income – excluded, while they could claim 80% of their total income; I am only permitted to file accounts and other legally required reporting, while my self-employed friends can continue seeking and accepting work offered.

 

My company’s income fluctuates throughout the year because the majority of the projects I’m working on at any one time run over several months. So I pay myself a small monthly PAYE salary then take dividend income when my trading profits allow. This is no different from my self-employed

 

 

 

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sole-trader colleagues in the industry. They also receive their income once their invoices have been paid. It just has a different name.

 

I’ve successfully run my business for 17 years, without ever needing any loans, and making enough profit to give me a modest but sufficient income. If it weren’t for this crisis I would have expected to continue doing so this year too, and for the next 20 years.

 

The Chancellor talks about sustainability, and comparing the costs of the various support packages with what is being spent on the NHS. But if small businesses don’t survive there will be far less tax revenue, not just from small business owners but also the millions of people they employ, to spend on the NHS, not to mention the very increased benefits bill that will result.

 

 

DWP response on support available to Small Limited Company Directors

5 May, Therese Coffey’s response to Rob Butler (on what can DWP do to help owner/directors of small limited companies): “small business owners who have set up their companies in particular ways, I’m sure well advised by accountants at the time on an optimal way to do that … [SEISS] is expected to cover 95% of people who receive the majority of their income from self-employment. But if not, then I would recommend that those other people do look online at their potential eligibility for Universal Credit

 

 

 

Evidence Session 29 April

I watched the Treasury Committee Evidence Session on 29 April, and downloaded the transcript a couple of days later. Rather disappointed that Stephen Barclay, Beth Russell and Katherine Braddock failed to answer so many of your questions adequately, but I’d like to pick up on three responses in particular from Beth Russell and Stephen Barclay, relating to Dividend Income and Small Business Grants:

 

From Beth Russell (on Dividend Income): There is both a fraud risk and an error risk, because it is difficult for some people to work out themselves what dividends relate to their business versus other dividend income they might have.

 

 

 

 

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From Beth Russell (on looking at proposals for ‘pay now, claw back later’): “we do not have information on these people …”

 

From Stephen Barclay (on Small Business Grants being linked to SBRR): “Part of the reason for linking it to property is that property is a significant fixed cost of business.”

 

 

The hard edges for Small Limited Company Directors

 

Government Support Checklist:

 

I am a #ForgottenLTD https://www.facebook.com/ForgottenLtd/

https://twitter.com/hashtag/forgottenLTD?src=hashtag_click&f=live

 

 

Chancellor’s response to the Treasury Select Committee (published 21 April 2020)

The Chancellor’s letter to the Select Committee, dated 20 April, made for depressing reading. Mainly because he failed to answer the majority of questions posed by the Committee, but also there were a few standout comments that really felt like a slap in the face.

£16,000 in savings “In such cases, it is likely that they have alternative means of financial support” and assessing “total household income to ensure welfare supports those most in need who do not have access to additional financial assistance” Neither the CJRS for standard employees nor the SEISS is means-tested. As the committee pointed out there should be a level-playing field.

 


1 I note that the Small Business Grant fund had been topped up (2 May) to cover those in shared workspaces. However, it is discretionary.

 

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Chancellor’s apparent view on Dividend income

To quote Andy Chamberlain from IPSE: “There was absolutely no way he was going to consider 'replacing' dividend income in the same way as he has 'replaced' earned income. He says dividends are primarily a return on investments. We argued, he firmly rejected the point” (https://twitter.com/AndyIPSE/status/1243460876507713536)

 

The truth is the dividends that small limited company directors pay themselves is a return on their labour. What we have invested in our companies is our hours of income-generating work. This is earned income, and completely different from dividend income from investing in the stockmarket.

 

 

Tax Avoidance Rhetoric

It doesn’t matter what term is used – efficiency, avoidance, evasion (I’ve heard from some quarters)

  micro company directors paying themselves partly through dividends is neither tax avoidance nor tax evasion and isn’t especially efficient.

 

We pay:

 

         Corporation Tax

         Dividend Tax

         A higher proportion of VAT on our business costs because we can't benefit from the economies of scale that larger companies can

 

For an income up to £50k ‘tax advantages’ for a director paying small PAYE + dividends, rather than all PAYE are minimal.

 

We don't get:

 

         Sick Pay

         Holiday pay

         Redundancy pay

         Employer pension contributions

 

All this has to come out of our trading profits ie our Dividend payments. Plus accountancy fees for company accounts are a great deal higher than for Self Assessment Tax returns for the Self Employed.

 

 

 

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Even if we paid ourselves PAYE above the Secondary NI Threshold – therefore, paying both employee and employer NI – we don't get equal eligibility to benefits from those contributions. Which is also the case for the self-employed who do pay NI, compared to employees.

 

 

My observations on the cracks in support and solutions to fill those cracks

 

Some key points that need to be address are:

         Small Limited Companies: Dividends income to be included in support scheme, so at least equivalent support as that for the Self-Employed

         Furloughed Sole-Directors: allow sole directors to continue working beyond just statutory duties

         Small Business Grants: eligibility for all small businesses, not just those that have premises with a rateable value, or work in shared workspaces

         SEISS: extend support to those who began Self-Employment after April 2019

         Bounce Back Loans: not an equitable alternative For more detail on these see below:

Small Limited Companies

Exclusion of Dividend Income

It seems to me that the government’s claim that the dividends income that sole-directors pay themselves couldn’t be included in the support offered because the tax system does not distinguish between such dividend income and dividends from other shareholdings, is rather a nonsense. There is a paper trail and, between HMRC and Companies House, the government already have all the necessary information:

 

1.       The Tax Schedules that are prepared by accountants (and submitted to HMRC) alongside the Self Assessment Tax return clearly itemise the source of all dividends income. So, in my case, the £50 or so dividend income I receive from the few shares I have can easily be distinguished from the dividend income from my own company. A simple calculation of the minimal PAYE and the dividends received from that same company (identified as my employer on my Self-Assessment) is all that should be needed.

2.       As well as Self-Assessment Tax Returns small company directors also have to submit Company Accounts and Company Tax Returns.

3.       Employer/Employee PAYE references will also evidence micro company structure

 

Surely it can’t be too hard to marry up these records in order to offer support equivalent to the SEISS package.

 

Solutions:

 

         If the government can design a simple form for Bounce Back Loan applications, it can’t be any harder to design one for our accountants to submit a claim for our dividend income.

         Base the support on 80% of a micro company’s profits before tax (average of 3 years from Company Tax Returns) + 80% of the PAYE salary, up to a £2500 a month threshold per company director. This will give parity with the SEISS grant (for sole-traders and LLPs) being based on Trading Profits and make it simpler for tax ie based on the same returns we already use.

         On the matter of fraud, our accountants already have to include a Return Declaration (which we as directors bear responsibility for, or otherwise face hefty penalties) on our Company

 

 

 

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Tax Returns. Seems to work fine when HMRC are checking we’ve paid our Corporation Tax liability correctly.

 

Furloughing and Statutory Duties

Currently there is a huge inequity between the support offered to the Self-Employed and directors of Small Limited Companies who put themselves on furlough. The former can continue working to generate income, the latter cannot. There is also inconsistency in the guidance given on what duties furloughed director are permitted to do.

 

As the Institute of Directors has pointed out, the Government’s direction to HMRC (issued on 15 April) appears to restrict a furloughed director’s duties to filing accounts and similar legally required reporting, thus excluding tasks such as paying suppliers or administering the furloughing of other employees.

 

The example Martin Lewis (Money Saving Expert) gave of the conflicting answers he’d received from different government departments about permitted duties related to preparing advertising or marketing material for future work. One department said this would be permitted, the other not.

 

I would have thought, in both cases, such duties would fall under the Duty to promote the success of the company. In particular the points highlighted below:

 

(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

 

(a) the likely consequences of any decision in the long term, (b)the interests of the company's employees,

(c) the need to foster the company's business relationships with suppliers, customers and others,

 

(d) the impact of the company's operations on the community and the environment,

 

(e) the desirability of the company maintaining a reputation for high standards of business conduct, and

 

(f) the need to act fairly as between members of the company.

 

Will we be prosecuted for not performing the above statutory duties as laid out in law in the Companies Act 2006 …?

 

Ultimately small limited company directors should be able to receive support while still being able to perform duties that would generate income, whether in the future or on the basis of short-time working, as is the case with the Self-Employed.

 

 

 

 

 

 

 

 

 

 

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Small Business Grants

Although the Business Secretary’s announcement on 2 May of additional Small Business Grant funding for businesses with ‘fixed property-related costs’ is welcome, worryingly, I note this funding is discretionary and not necessarily equal support: “local authorities will have discretion to make payments of any amount under £10,000.” It also still excludes many who’s ongoing fixed costs aren’t deemed ‘property-related’.

 

Small Business Grant funding needs to be extended to all small businesses. Both owner/directors and the self-employed have fixed ongoing business costs.

 

Bounce Back Loans

Although this addition to the available support packages is welcome for those small business that wouldn’t otherwise meet eligibility criteria for business lending, the Bounce Back Loans are not an equitable alternative to the grants that others are receiving. In the most extreme case the only support on offer for a sole-director is a loan they have no idea whether they be able to pay back.

 

 

 

Thank you again for keeping the pressure on. We Small Limited Company Directors have been forgotten. We have been left behind. If we don’t get parity of support now we will not be ‘all in this together’ to help the economy recover, nor will the millions of others that collectively we employ, and the economic impact of Coronavirus will be so much worse.

 

May 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Written evidence submitted anonymously

 

To the Treasury Committee,

 

I have been self-employed as a video editor for almost 18 months. I’m a new sole trader, still building up a book of contacts and finding my feet as a freelancer. This pandemic has hit me at a very vulnerable time, when work is not always consistent. Well-paying jobs have almost completely dried up because my contacts base and previous work portfolio was not strong enough to sustain the impact Covid-19 has had on the media and production industry.

 

I am not eligible for the government’s self-employed grant scheme. I have filed a tax return for the three months of the tax year 2018/2019 that I was trading, but the income from my freelance work counts for less than half of my earnings that year due to my previous full-time job, meaning I cannot claim any support during this time of massive uncertainty.

 

Other freelancers who are more established in their businesses than me, who are still able to find jobs through their extensive networks of contacts, are able to claim this grant, even if their earnings have only reduced slightly. They may even be better off than they were before Covid-19. The way the support system works is unjust, leaving out those who have recently gone freelance and are very vulnerable to business collapse during this time. We need this grant to stay afloat when work doesn’t come easy.

 

Why can we not use our 2019/2020 tax returns to prove our earnings as freelancers? The information is easily collected and filed. Why can we not be given a lower, base monthly total as compensation for the earnings we will be losing during the lockdown and beyond?

Something, anything to help us through this, instead of being completely shut out.

 

I currently am unable to claim much support on Universal credit because I am still receiving payments for old invoices. If I were eligible for the government’s grant, these payments would make no difference to the amount of money I would receive. How is this system fair to those who really need the support of the scheme to see them through the next few months? Particularly when others with higher incomes will be receiving thousands of pounds from the Government in lump sums.

 

I know of multiple self-employed people who for various reasons are set to lose out on financial help due to the current restrictions on who can apply for the grant. Please reassess the restrictions of your scheme, to include as many of the self-employed as possible, so nobody is left out on the support they desperately need.

 

May 2020

 


 

 

Written evidence submitted anonymously

 

I became a self-employed copywriter in May 2019, after leaving my job of 15 years.

 

I was busy with work continually until March 2020, working on three consecutive contracts. When my final contract ended, I went on holiday for 2 weeks, arriving back on 22 March. Lockdown was imposed on 23 March and I have not had a day’s work since.

 

Because I became self employed in 2019, I have been excluded from the Self Employment Income Support Scheme. We are told we cannot submit our 2019/20 tax returns as proof of income, as HMRC cannot tell whether we are frauds or legitimate businesses. I find this reasoning illogical. Those who were late filing their 2018/29 returns were given extra time to submit theirs – if there was no risk of fraud with them, why should there be a risk of fraud with us? To save HMRC effort, honest workers are being punished – it’s immoral.

 

Universal Credit has been a non-starter, as my tax savings make me ineligible. When I queried this, I was told if I paid my tax bill I could submit an application. Yet I now need my tax savings to live on – I don’t know when I’m going to work again. Finding work is virtually impossible - no one is hiring freelancers when so many of their own employees are furloughed. The clients who previously used me are running only skeleton teams. There are barely any job openings on Linked In.

 

Until May 2019 I paid PAYE contributions for 25 years. I’ll be paying thousands more in January 2021. I’ve never claimed benefits. Yet in the biggest crisis we have ever known, I have not received a penny from the government in support. The uncertainty is having a crazy impact on my mental health. I’ve heard a lot of concern for the anxiety of furloughed workers, but none for the newly self- employed. We’ve been hung out to dry.

 

I believe newly self-employed people should be allowed to submit their 2019/20 tax returns as proof of income. We’re legitimate businesses who were registered as self-employed well before this crisis hit. We can supply enhanced evidence, if needed. Any support would be better late than never.

 

I’m extremely afraid that the government is going to keep extending the lockdown, keep supporting the people it has already helped, and keep ignoring those it hasn’t – like me. That may be the politically expedient thing, but no one involved in these decisions will ever be able to say it was the right thing.

 

May 2020

 


 

Written evidence submitted anonymously

 

May I please explain my circumstances as impacted by the Coronavirus and how government measures to date have failed to support myself and others in similar circumstances.

 

I am a sole trader, registered as self-employed for about ten years now. I am a freelance sports photographer supplying images to media agencies, newspapers, websites and magazines etc.

 

I last worked on March 10th and due to the lockdown do not currently expect to work again until August earliest, at best. As I would have to invoice and await payment from clients I do not expect to receive any income until October earliest. The likelihood is that I will undergo a minimum six month break in receipt of any income at all.

 

When the Chancellor announced support for the self-employed I personally breathed a huge sigh of relief because I knew my savings would not last through a six month period. I have until this week felt secure throughout this situation because of this and continued to pay all of my bills.

 

I do not qualify for Universal Credit, CBIL or any other support.

 

Now I have been informed that I do not qualify for SEISS support. The reason for this is because during the 2018/19 tax year I cashed in a personal pension. This money was used primarily to purchase new equipment for my business. This was a major investment for me, the equipment purchased would enable me to continue in my job for a period of five years. Because of this income, which was taxable, and the way I spent it, my non-trading income was higher than my trading profit for the SEISS assessment period and therefore disqualified me.

 

My accountant confirmed my ineligibility for this reason and informed me that I might aid my situation by applying for a Bounce Back Loan (BBL), which although this was repayable, as opposed to the SEISS grant, it would at least tide me through the period. I applied for a BBL and have been told I do not qualify. The reason I do not qualify is because the assessment period is the 2018/19 tax year and of course during that year my non-trading income was higher than my trading profits.

 

So I am now in a position where I do not qualify for any government support and the reason I don’t qualify is because I invested in my business.

 

As previously stated I cannot sustain this period without income so my only available option is to sell my equipment, therefore surrendering my ability to earn future income and closing my business.

 

How can this be right when others have received support without any qualifying requirement?

 

May 2020

 


 

Written evidence submitted anonymously

 

I am a lone trader, who started in August 2019. I work in the exhibition industry, which understandably has been shut down due to coronavirus and won’t recover for some time. I feel like I am one of the businesses that have slipped through the cracks for financial help.

As I am a start up I do not qualify for the Self employment Income Support Scheme. I also can’t get the Business Interruption Loan Scheme or Bounce Back Loan as I could get a “New business” Loan (at higher interest). I can’t get universal credit as between my husband and I we are just over the threshold in savings.

I have tried just getting a temp job to get in some money but as I’m needed to look after the children during the day (due to school closures) I am not flexible enough for them.

There are literally no options for me but to use our savings to pay the bills until the events industry recovers, which is very frustrating. Had we have spent our wages and not saved; we would be entitled to universal credit. It doesn’t make sense.

Ideally there would be a small grant available to help start up businesses like mine make it through this time, so that we are not forced to close shop before the industry recovers.

May 2020

 


 

Written evidence submitted anonymously

 

I am writing to you with regards to the Self-Employment Income Support Scheme (SEISS) which has been introduced to self-employed individuals who have been adversely affected by Covid-19.

 

I have a huge issue with this in that it is only available to those with trading profits of £50,000 or less.

 

1.       Why has this £50,000 cut-off amount been introduced, especially given that there is no such cut-off amount in the similar Job Retention Scheme for employees?

 

2.       It is highly unfair that someone with trading profits of £50,000 is able to use this scheme in full and receive a grant of up to £7,500, yet if your trading profits are £50,001 (only £1 more) or more then you are entitled to absolutely nothing under this scheme.

 

This is hugely discriminating against self-employed individuals with trading profits of above £50,000 who have been severely affected by covid-19, compared with employees and self-employed individuals with trading profits of £50,000 or less.

 

It is hugely unfair that a self-employed individual could receive no grant at all compared to a self- employed individual that has trading profits of £1 less and is entitled to a grant of up to £7,500.

 

It discriminates against individuals whose trading profits are above £50,000 and are correctly declaring all their self-employment income to HMRC compared to self-employed individuals that have trading profits in excess of £50,000 yet are declaring less than £50,000. This sends out all the wrong messages such as ‘it pays to cheat’.

 

Self-employed individuals with trading profits of over £50,000 may have lost their entire income due to covid-19, and may not have savings yet still have mouths to feed and have regular outgoings. The Universal Tax Credit offering is by no means a sufficient help, and is far less than the amounts offered by the SEISS.

 

I would therefore ask that the £50,000 cut-off amount for the SEISS is removed so that all Self Employed Individuals who are affected by Covid-19 are able to use it.

 

 

May 2020

 


 

Written evidence submitted anonymously

 

I work as a freelance Production Assistant in the film industry, predominantly in Advertising. Due to Covid 19 I have not been able to work and am very anxious I will not be working for quite some time.

 

I was under the impression I would be eligible for the Self Employment Income Support Scheme, however I recently found out that I am not - due to earning more in my full employment than I did with my self-employment for year 2018/2019, 2018 being the year I went freelance.

 

I am urging the government to look into the Self Employment Scheme Eligibility as I know so many people in the creative industries, like myself, who are falling short and are consequently really going to struggle.

 

I’ve now been self employed for 18 months, I’ve completed a tax return for 18/19, I earn less than the £50,000 cap, I do not have a Ltd company, I will be paying my advance tax payment for 19/20 in advance and I will be trading for the foreseeable future.

It seems unfair that I am unable to get help when I will need it most.

 

May 2020

 


 

 

Written evidence submitted anonymously

 

To whom it may concern

 

This is to respond to the question as to whether the Government has successfully plugged the gaps in the job retention scheme, as well as to comment on its approach to detecting fraudulent claims.

 

 

I started a new job as an EFL Teacher at […], on a year’s renewable contract, on 2 March. When the country went into lockdown, the school had to close. It looks set to remain so until social-distancing in classrooms becomes viable, and until overseas students feel confident to attend classes in the UK.

As is normal practice in most salaried jobs, I was paid at the end of March with the RTI submission reaching HMRC just before this. Consequently, I am not eligible for the furlough scheme, despite still being, and wanting to be, employed. […] are also keen to keep me on.

I live alone, so my household is dependent solely on my salary. I have lost 100% of that. As I am employed, I am not eligible for Universal Credit. As to finding temporary work, unfortunately the jobs available at the moment are not advisable for someone with asthma. Mortgage holidays and rental help aside, I wonder what the government imagines I and others like me are living on.

I have emailed my local MP, the Treasury and the Prime Minister himself with regards to the Government’s oversight in not providing financial relief to me and the thousands of others in the same position as me. To date, only my local MP has responded, expressing the rather fatalistic attitude that these are unprecedented times, and that the Government is already helping millions of business and individuals, therefore it is unlikely to extend the furlough cut-off to accommodate us. The fact that millions are receiving help is great. However, this does not help us, nor does it justify ignoring our claims. He has now ceased responding to me. Currently, I feel powerless, dismissed and undervalued as a taxpayer.

On the issue of fraudulent claims, I am not aware of all the measures which have been put in place to detect these. However, I can comment on the preventative measure which has resulted in the Government refusing to budge from the 19 March cut-off date. This is overzealous and does not make sense to me. It should be very simple now for HMRC to see retrospectively who was genuinely employed, who paid tax and NI at the end of March. It should now be possible to include us on this scheme, rather than lumping us together with potential fraudsters.

The pandemic is by no means over, and its after-effects will be with us for some time to come. As a genuine new job starter, I do not feel it is unreasonable to request the same financial relief that the Government is affording to other employees. Even if it is just until June, at least this will provide some cushioning from the hard times to come.

Thank you for taking the time to consider my case.

May 2020

 


 

 

Written evidence submitted anonymously

 

I am a self-employed , classically trained singer, aged 61, and have worked as such since 1980. My work is almost all in live performances all over the world, with 80 – 100 concerts plus recordings. This is my personal story, but I know about an awful lot of others.

I believe I can claim the 80% of my profits for the last three years, and will find out later this month. However, this is only three months’ worth of money, and so far, all my free-lance work has been cancelled up to August, with most of the rest of this year looking precarious as well.

So far, I have lost somewhere between £10,500 and £14,000 worth of work due to the current situation, and my income in total from March to September looks like being less than £1,000. My calculation of what I will get from the Government scheme is about £4,000; I have just too much in savings to apply for more, but the fact is that as a singer I may be unable to work for the rest of this year, and possibly next year too.

There are many people in this situation. Singers, other musicians, all kinds of performers who cannot work if venues aren’t open. Will the Government let them all just slide into unemployment? Three months’ worth of money is not going to plug this gap. There needs to be some way to keep our performers in a state where they will be able to pick up and start again the minute circumstances allow. Many of us would be happy to do other things, to be useful (I’m currently volunteering for the NHS and helping with some online Church services), but given the general level of unemployment after this pandemic, people such as myself may find it very hard to start another career.

Working out a scheme whereby musicians, actors, dancers and singers can actually work and be paid seems important. Special studios where things can be properly recorded and sent out on-line to a paying audience? There’s plenty of free stuff out there, but we make virtually no money from our existing recordings being played on Spotify etc.

I know you have many other things to consider, but our country needs good music to still be there.

May 2020

 


 

Written evidence submitted anonymously

 

I am a British citizen, originally from Southampton in the UK, now living in New Zealand. I worked in europe for many years and payed taxes as well as private pension contributions. I am an independeant IT contractor and author of open source big data books.

 

The current virus situation may be solved by either drugs or vacinations within a year or two but I think that the economic impacts in my industry are going to be felt for decades. The current lockdown situation across the UK, New Zealand and many other countries has severely impacted my industry. I am an independant worker so I do not receive government handouts or grants when out of work.

 

I have been forward thinking about my financial future in the fact that I have both savings and pension plans. However, my savings will not last for years and tax laws in the UK stop me from accessing my private pension funds in times of crisis.

 

My question to the UK government representatives is this.

 

When my savings finally run out would they support people like me accessing my private pension funds or would they prefer that I queue in free soup kitchens. I ask this not to be provocative but because I am monitoring just this kind of situation in Thailand now. My savings cannot last forever and so I believe that tax rules must be adjusted in the short term so that people do not end up in a desperate situation. This also avoids the need for government support.

 

I will provide my details below but please keep my name confidential as I would be embarrassed if my family, friends or peers were to realise my situation.

 

May 2020

 


 

 

Written evidence submitted anonymously

I would just like to give feedback on how I feel the Ltd companies have been treated in this current time die to Covid 19.

My husband has been self employed for 13 years, the last 3 of which he has been registered as Ltd. This was upon advice from a few various people such as his accountant, insurers ( due to his work) & also companies he did work for wanted him to be Ltd.

We have been labelled tax Dodgers by the government which I find extremely disrespectful & discriminatory. Since 2016 the way in which tax was paid for Ltd companies has changed dramatically & was brought into line with standard rates. If you look at the charts out there the difference between self employed / employed & ltd is now minuscule. The difference is about £500 a year. I’m my opinion that isn’t us “having it easy" and makes us just as entitled to help from the government as everyone else that has been given it.

Yes the government have given Ltd companies help but there are way too many cracks in their schemes and all we want is parity. For example:-

1.      Furlough – we have decided against this as if you are a Ltd director you can’t do any work to generate income. This essentially means leaving your business slowly wilt and not having anything to go back to when this is over.

2.      Grant’s- Many of us don’t qualify for Grant’s as we either work from home or via Van’s. Yet the self employed have received a grant AND still allowed to work.

3.      BBL – To many this is the only option for them at this time but taking on debt / more debt at this time when the situation is so unknown is crazy. These cannot help out personally either or to buy assets with.

My husband work has been affected dramatically due to restrictions allowing him into peoples properties. He runs a solid fuel installation / property maintenance business. Small businesses have always been the back bone of the economy & by not helping with Grant’s these will crumble and leave such a big hole.

We feel that everyone else has been given help but Ltd companies aren’t worth receiving any.

Without help these business will end up folding which will in turn lead to many more people becoming unemployed. Its all well and good the government paying their wages under the JRS but if you don’t help the actual business then I see that as a waste if money as their jobs haven’t been saved they’ve just been prolonged for a few months.

 

 

Ltd companies need your help now please. We don’t want to be furloughed and leave our business crumble, we don’t want to be left with loans hanging over us if business doesn’t pick up, universal credit isn’t available to majority if their spouse is receiving a wage under JRS.

 


 

When we go for bank loans or mortgages we are classed as self employed. Even when you apply for Universal Credit they class a Ltd director as self employed! Our dividends are classed as earnings which is the case in every situation apart from yours now.

 

 

Even if you were to just offer a grant to all instead of drafting up a scheme to include dividends, we just want some sort of parity. We are not baddies who are doing something underhand and illegal. Everything we do & how we run our businesses is 100% legal.

 

 

So please, before it is too late for many, please help with Grant’s so people like me can keep a roof over my families head, food on the table for my children, money in my account whilst I can’t work to pay Bill’s. This is through no fault of our own and we need our government to help before mental health is adversely affected.

 

 

As stated by Rishi & Boris on one of the first statements “no one will be left behind" “we will make sure everyone has an arm around them".

 

 

#forgottenLTD need your help now and stop being discriminated against.

 

 

May 2020

 

 

Regards

 

 

Morris

 


 

Written evidence submitted anonymously

 

 

 

Subject:

 

Impact of government economic interventions on sole directors of limited companies without premises

 

Summary of key points:

 

1)   Many limited company directors are not incorporated by choice, rather because of procurement rules imposed by government agencies, e.g. NHS;

 

2)   The lack of support for these directors, who otherwise would be ‘self employed’ as sole traders, is causing severe financial hardship and means many will be unable to withstand the economic hardship during recovery;

 

3)   There are potential alternative ways of overcoming the ‘disaggregation of dividends’ issue, including potentially offering corporation tax rebates to solve the issue; and

 

4)   The unequal support for sole trader competitors is potentially anti-competitive and will further drive micro limited companies out of business.

 

Evidence submission:

 

I write as a sole director of a micro limited company, offering bid writing, graphic design and business support for charities and public sector organisations in the health and social care and education sectors. I have been undertaking this work for approximately 20 years. I earn a very modest amount from my work.

 

 

 

 

 

Page 1

 


 

The specialist services I offer are often lacking within those organisations and without the support in bid writing and tendering, many would not be able to secure the funding necessary to deliver services to the most vulnerable in society.

 

The work normally undertaken by my business, and others like mine, dried up overnight upon the announcement of the coronavirus measures. Many of the commissioning organisations, such as Local Authorities and the NHS, have, perfectly understandably, diverted their efforts from day-to-day procurement to frontline coronavirus-related work. Many contracts due for renewal have been extended to enable a re- focusing of commissioner efforts on other things. This is, of course, the right thing to do. Health comes first and this is a national emergency. But our clients do not, for the time being at least, need our services.

 

Thus, for me and many fellow businesses in the same situation, the sudden lack of work has caused financial difficulty, despite a significant level of ‘rainy day planning’. Compounding this are the ‘gaps’ and anomalies in the government support measures that have brought to the fore a number of issues forming the content of this evidence:

 

1)                Obliged by government policy to become a limited company, rather than choosing to do so

 

For many years, I operated as a sole trader and was happy to do so. However, when I was asked to support a local NHS service with procurement advice, I was informed that I would need to work under the banner of a limited company. NHS procurement rules, stipulated by government, prohibited the use of sole traders. Even though the administrative and time burden

 

 

 

 

 

 

Page 2

 


of becoming a limited company was significant, I had no alternative but to comply or refuse the work.

 

I am aware of other companies in a similar position. Many clients, including some of the larger ones within the third sector, have followed the lead of the government agencies and decided to only use limited companies as sub-contractors, stating this assists their ‘due diligence’ processes.

 

Whilst there is much coverage of the tax benefits ‘enjoyed’ by limited company directors, my own experience has been that these modest benefits have been offset by the increased costs of running the limited company in terms of accountancy, fees, administrative costs etc. These are inescapable as a director of a limited company and are not faced by a sole trader. To be clear, I would much rather be a sole trader. But the government agency rules have placed me in a position where I have had to set up the company and take on the administrative burden that goes with this.

 

This existing burden is now compounded by the lack of comparable financial support offered during this critical time.

 

Maybe it is time for the government to consider reversing this policy so that businesses like mine can return to sole trader status whilst still providing vital services to government agencies?

 

2)                Financial hardship

 

As a result of the Treasury’s decision to exclude limited company directors without premises from the business grant schemes and also from the self-employed scheme, SEISS, many people operating under my (government-enforced)

 

 

 

 

 

 

Page 3

 


business structure are at a significant disadvantage and struggling to make ends meet.

 

Many, like myself, pay ourselves using a mixture of both PAYE and dividends. My earnings are very irregular. Therefore I only take the majority of my earnings when I know that there is profit available, normally at the end of the financial year. All earnings are declared both through the self assessment and the company accounts. There is a clear trail showing the dividends taken, declared to Companies House.

 

Those dividends are already used by HMRC to calculate personal taxation and to adjust PAYE tax codes. There is, therefore, already a direct link with PAYE. This often results in an adjustment to the PAYE code, as I have seen this year, in line with the advanced payment on account payments made. (Incidentally, I shall have to wait until the next tax year for any due refund on this, having now paid tax twice-over in advance for this current tax year, both through the tax code system AND self assessment something I would never have had to do as a sole trader, or as an employee before that). But the point is – HMRC are already using my dividends to affect my PAYE, yet for the purposes of the Job Retention Scheme, they are deemed irrelevant and excluded. Is this not a double-standard?

 

This means that any claim under the Job Retention Scheme can only be based on PAYE earnings. This is small and does not cover monthly outgoings – although it is nevertheless very welcome.

 

3)                Alternative ways of dealing with the problem

 

I understand the point made that it is difficult for the Treasury to disaggregate dividends earned in a ’self employed’ capacity, from those earned by individuals with passive share

 

 

 

 

 

Page 4

 


portfolio. Whilst I do not fully accept that it is so difficult to obtain the information, and I certainly feel the ‘claw back’ system, with stiff penalties for false declarations, would be a very workable solution, I do have some sympathy for  the  Treasury’s thinking. However, I also wonder whether there are other solutions.

 

Therefore, rather than focusing on dividends, I wonder if it might be worth asking the Treasury to consider something that focuses more directly on the Corporation Tax calculation that would have released the dividends in the first place, rather than on the cover-all ‘dividend’ submission on the self assessment form, given that both are fundamentally linked?

 

For example:

 

 

 

 

 

 

 

 

 

Page 5

 


 

 

         As all dividends are inherently linked to corporation tax, given they can only be paid on any profits after tax has been paid, the reduction in tax payable would be a reflection of earnings;

 

 

 

 

 

 

Any such system would eliminate any issue about identifying the source of the dividend income, as it is directly linked to earnings through the limited company. It would also provide small

 

 

 

 

 

Page 6

 


businesses with the freedom to release set-aside funds immediately in anticipation of the rebate - and direct the funds to where they are most needed, whether that be Director salary for those not receiving any other salary help, or business resilience-building if the director felt that were more appropriate. This would be a great relief to many people anxious about the on-going viability of their business.

 

 

4)                Anti-competitive interventions

My final point relates to the ‘recovery phase’ of the current crisis and the impact of the disparity of government intervention on competition.

At present, the absence of grant-support or a comparable income support package means that the only option for many sole director businesses is to apply for a ‘Bounce Back’ Loan. This obviously involves placing the business in debt. This will not be the case for our sole trader competitors, or those businesses with premises, who will have received non- repayable grants.

 

As we move forward, we will all be bidding for the same work. When bidding for this work, our pricing will of course have to cover the newly-acquired debt overhead; our competitors’ pricing will not.

 

Likewise, if we are forced to furlough as Directors, we are not permitted to undertaken any income-generating activity for the company. However, our sole trader competitors can continue to work. This will include maintaining and nurturing customer relationships. Again, this rule will ensure competitors have an in-built competitive advantage when the emergency is over. Could not an exception be made for limited company directors to be able to continue an element of work, not least to prospect

 

 

 

 

 

Page 7

 


for potential work at the end of the crisis in order to better hit- the-ground running?

 

As it stands, even if we can keep our heads above water during the period of shutdown, we may find ourselves subsequently defeated by the government’s unequal subsidizing and treatment of our direct competitors. This feels very unfair and would be worthy of some exploration by the Committee?

 

In submitting this evidence, I would like to recognise that this is not an easy situation for any government. Few of us would want to have to make these life and death decisions. It is a national emergency. The help provided to so many people will be very much welcomed. But there are gaps. And in order to rebuild after the emergency passes, the government will need the help of ALL individuals and businesses to recover. If we are left behind, or worse still go to the wall, then a significant national resource will be lost… and that will cost far more in the longer term than the short-term investment required now.

 

May 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 8

 


 

Written evidence submitted anonymously

 

I am a director of a small business, a tea room, gift shop and visitor information centre, which has been severely impacted by the Coronavirus pandemic. I own a tea room which was forced to close suddenly losing all revenue overnight. As a tourism related business this could not have come at a worst time, we lost our single biggest trading day of the year, Mother’s Day and then all of Easter holiday trade to start with. To put this into context we generally trade at either a loss or break even during the winter from November to March, during this time we cannot afford to take any personal income from the business and therefore look forward to Easter to be able to do so after several lean months.

 

The CJRS was welcomed to help support our staff, we were to have made redundancies and this scheme helped to prevent this. We are now having to reconsider this as the fact that employees are still accruing paid holiday entitlement during this period of furlough will be a cost burden that we can ill afford if we survive through this as a business. It is most likely that trade will be radically reduced when we reopen and so costs and particularly significant staff costs will have to be reduced pro rata.

 

It was a startling discovery to find out that we as business owners were not covered for the majority of our own personal income by this scheme. When the first furlough claim came through we paid thousands of pounds over to our team and had little for ourselves. We had all the stress and huge anxiety of sorting out drastic measures to help our business to survive, agreeing payment plans for our outstanding liabilities and basically putting our tea room into mothballs after 11 years of trading.

 

Government support schemes covered those in employment through PAYE and the self employed but not us as directors of a small business. We received a cash grant for the business because of our rateable value and this was passed on to suppliers, pay utilities bills and our landlord, it was not for our personal income and not to be used as such. We were told we could take out a loan, we never incurred any debts in starting the business but we were told we should do this, very different to what employees and self employed were being told, why are we different.

 

We took the majority of our income through dividends after we had paid corporation tax on profit. We abided by the rules set by government and were advised to do so by our accountant, so we did fully and properly. We are not wealthy, we earned routinely £40-50,000 a year, yet we now feel tarnished as though we have been tax dodging billionaires.

 

There were reports of large organisations jumping on the furlough bandwagon using it to decrease their payroll bills, of companies profiteering from such, and yet we couldn’t even cover our own personal income. A 17 year old girl who worked part time for us at the weekend whilst still at school had £160 in furlough pay and yet my husband received not a penny. How unfair is this?

 

We are trying to plan to reopen if we survive the period of closure. We have compiled cash flow projections several times over. It looks likely that our turnover will be decimated due to necessary social distancing measures and the look and feel of our business will change dramatically. Visitor numbers will be severely affected from both the U.K. and abroad. Our ability to service customers or accommodate them as seated customers will hugely impact on sales per head. It looks as though consumer confidence may mean that we operate a more takeaway style operation with lower spend per head anticipated also, a double whammy. We therefore will have much less revenue yet we will be expected to pay the same costs for our rent, business rates, electricity   etc              will our suppliers want to reduce their costs to us to share the load, we doubt it.

 

We also have additional costs before we open which include social distancing instructional signage, investment in procuring takeaway disposables such as coffee cups and food wrapping materials. Things like hand sanitizer gels and dispensers which we also need have tripled in price. We will also need acrylic sneeze screens for the till areas and new fully covered cake cabinets for display. We anticipate all these additional costs will amount to around £7000, something we can ill afford with no revenue since March.

 


 

And then the dilemma of the prospect of not being able to start to trade again until the autumn, missing out on our profitable months. It will be extremely difficult to survive as a business if we have no interim support during this period. Things like deferring VAT, NI or things like corporation tax will not help us, they merely postpone debts that still have to be paid. Not being liable for business rates will only save us £5500 this year and £22000 next year. We will need assistance with a phased furlough scheme as we test the water with staff costs to see what sales there will be to sustain our staff costs.

 

The impact on our personal income will be right through to when we are able to go into profit again, if we have no profit there are no dividends for us to take. After a significant period of time from March of this year with no personal income it continues to be a crisis for us. We had built a successful business through many years of hard work and we are expected to be the only sector in employment that are expected to go into debt to get out of this. I simply ask why is this? Please do not let anyone to say the system will not allow this, it is simply not true.

 

May 2020

 


 

Written evidence submitted anonymously

 

My name is […] and I am the sole director of my limited company […] which offers marketing and brand management services to businesses ranging from start ups and not-for-profits, to larger retailers and agencies. It's been almost two years since setting up my business and I've grafted hard to build up my client base and work hard for my clients with hope of growing my one woman limited company in the near future.

 

I am now in a awful position as I am not eligible to any government income support and all my contracts came to an end in March due to the Coronavirus outbreak. A long with many other limited company directors, we are all incredibly scared, confused and angry. We do not deserve to be left with nothing, and are being penalised for setting up our businesses in line with what our accountants and the governments have laid out for us.

 

And whilst all we are hearing is that it is 'too difficult' to calculate support for Ltd directors who pay themselves mainly in dividends, myself and many others will be unable to continue their businesses and as a result will fail within the next few months without any support from our government. We have proof our tax returns, company numbers and the majority of us don't have shareholders, so the decision to completely leave us out of any income support is crippling for our futures as entrepreneurs.

 

Many of us don’t qualify for small business grants as we’re not in commercial premises. Taking on debt to support our livelihoods isn’t an option. Without rapid assistance, many of us will go under – costing jobs today and crucially those we could have created in the future.

 

We are calling on the government to immediately:

 

  1. Allow furloughed directors to continue to work

 

No one should be forced to abandon their businesses, nor punished for unwittingly undertaking any action that may be deemed fraudulent. We need to be in the strongest position possible to emerge from this crisis intact and to play our part in the country’s economic recovery

 

  1. Extend Business Support Grants to all small businesses We need support now to save and sustain our businesses
  2. Protect our incomes by extending SEISS to encompass small limited company directors

 

  1. To include PAYE (except where already furloughed), dividends and/or income classed as repayments to a director's loan for companies not in profit

 

If risk-takers, innovators, creators, and entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 7.5 million employees?

 

 

May 2020

 


 

Written evidence submitted anonymously

 

Support Needed for Small Ltd Companies

 

I wish to provide evidence to show that small Limited companies have been left out of the Government rescue packages to business through the Covid 19 crisis.

 

Myself and my business partner Helen Scott are both joint founders of a small ltd events business called […]. We put on Music, film and media events for large media companies who require us to be VAT registered for trading purposes, including public liabilities, and to manage all suppliers through our business on their behalf.

 

We are both working mums with families to feed. All of our events cancelled from Mid-March and until at least the end of the year. We will be the last sector up and running as and when we return to our new normal.

 

We pay ourselves a small PAYE amount of circa £700 and make up that amount monthly with dividends of £2300. We pay tax on both personal tax and corporation tax as well as VAT returns. We also have to pay our own insurances, accountancy fees and do not have holiday or sickness pay. We also employ a regular team of freelancers and other small business suppliers. We also commission caterers, photographers, designers, staging and crew suppliers.

 

We have been forgotten by the government. If we furlough ourselves, 80% of £700 is not enough to help with bills and outgoings. Our dividends (which we are taxed on) should be counted. Our company is […]. We have been trading for over 3 years.

 

I ask that you consider the following measures – in particular for companies within those sectors who will be the last to return to work:

 

1)  Allowing furloughed directors to continue to work to support their businesses

2)  Extending Business Support Grants to all small businesses

 

Please, please reconsider your measures to support small businesses like mine.

 

May 2020

 


 

Written evidence submitted anonymously

 

 

Small Limited Company Directors Excluded from Government Support – Covid-19 Crisis

 

We started our small but successful ballet business in 2003. […]

 

We import ballet shoes and accessories and distribute to dance retailers around the UK. We work extremely hard, have sacrificed a lot over the years, enjoy great relationships with our customers, and are very proud of what we have achieved, and the contribution we have made to the economy. We are 2 directors, and we employ 2 staff. The business has grown steadily over these 16+ years.

After some quite significant loss of margin over the last 3 years (exchange rates losses around Brexit) and loss of a major supplier, in January and February, our business was showing good growth again.

 

On 16 March, all orders from our dance store customers dried up overnight, as ballet classes around the country had ceased, and nobody was needing kit. It is unlikely to get going again until schools and ballet classes recommence. We therefore have virtually no income and no prospect of income until then. This is causing untold stress on our family.

 

Our business is our only source of income to pay for our mortgage, household bills, university accommodation, and food to keep our family. We pay ourselves through a mixture of salary and dividends .The Job Retention Scheme has been very helpful for our two employees, and the small business grant has been invaluable in paying rent and some of our supplier bills, (we thank you very much) but my husband and I find ourselves with only £550 for our whole family to live on.

 

I simply cannot furlough myself as it is my responsibility to keep the business alive and prepared to grow again and contribute to the economy. We have taken the impractical decision to furlough my husband, but as director, he is only entitled to 80% of his PAYE = £550 per month, and frankly we need him working on other back office tasks. We cannot understand why the government cannot take our dividends into account as part of our earnings and allow him to claim up to £2500 a month. (which would still not be enough for a family to live on but would help). So, we are having to extract every last penny out of the business to survive.

 

The only other option we have is a loan, which is not a viable or responsible option in uncertain trading circumstances. All we ask for is parity with other tax-paying members of the public and parity with the self-employed who can receive up to £2500 per month, continue to work and receive a grant. If we could both continue to work and earn this £2500, our business would have a chance of surviving and we could continue to keep our employees. With the current level of support, we may have to make them redundant as soon as the furlough scheme ends because there will be no funds left in the business to pay them or us.

 

We ASK YOU Boris Johnson, Rishi Sunak, Alok Sharma, Keir Starmer, Ed Davey, HM Treasury, HMRC - the Government, to acknowledge that Dividends received by the directors of micro entity Limited Companies CAN and WILL be differentiated from that of other Investment income (which in nearly all cases doesn’t exist).

Jonathan Geldart of the IoD wrote to MP’s in his press release of 17th April, saying, “Include company dividends earnings in income support”.

https://www.iod.com/news-campaigns/press-office/details/IoD-calls-on-MPs-to-support-small- company-directors

 


Mr Geldart, in his article in the Daily Telegraph dated 9th April 2020, points out that we Small Limited Company Director/Workers are:

1.       TWO MILLION PEOPLE RUNNING THEIR OWN BUSINESSES

2.       NOT THE “FAT CATS” THAT THE WORD “DIRECTOR” CONJURES UP

3.       THAT SOME OF US HAVE PUT A LIFETIME OF EFFORT IN TO OUR SMALL BUSINESS - WHETHER FOR EXAMPLE THAT’S AN, ACCOUNTANT, SOLICITOR, IT PROFESSIONAL, DESIGNER, ARCHITECT, PHOTOGRAPHER, ELECTRICIAN, PLUMBER, CARPENTER, ROOFER, BUILDER OR CAMERAMAN, to name but a few

4.       THAT MANY OF US TAKE ONLY THE BARE MIMINUM IN PAYE SALARY AS OUR INCOME IS ENTIRELY DEPENDENT ON THE BUSINESS WE CAN DRUM UP, AND ONLY TAKE INCOME AS DIVIDENDS WHEN THERE IS A PROFIT

5.       THAT MANY OF US ALSO, WHO ARE NOT PAID THROUGH PAYE, ARE PAID FULLY BY DIVIDEND ONLY AS OUR INCOME, IS ENTIRELY DEPENDENT ON THE BUSINESS WE CAN DRUM UP, AND ONLY TAKE INCOME AS DIVIDENDS WHEN THERE IS A PROFIT

6.       THAT THE GOVERNMENT’S RETENTION SCHEME DOES NOT COVER DIVIDENDS LEAVING US “HIGH AND DRY” AND THAT THIS NEEDS TO CHANGE

7.       ANY DIFFICULTY IN SEPARATING DIVIDEND INCOME FROM INVESTMENT INCOME FOR SHAREHOLDERS IS SUMOUNTABLE AS A PAPER TRAIL EXISTS and can be proven

8.       EVIDENCE OF OUR DIVIDEND INCOME IS IN OUR PERSONAL TAX RETURNS AND DIVIDEND VOUCHERS SO HMRC CAN DEDUCE ELIGIBILITY

9.       IT IS BETTER LATE THAN NEVER TO HELP US

10.   THAT THERE IS SIMPLE SOLUTION AVAILABLE HERE FOR GOVERNMENT WHICH IS THE “PAY FIRST, CHECK LATER” OR THE “CLAW-BACK METHOD”, ALSO PROPOSED BY MEL STRIDE MP AS A SOLUTION TO FIND FAIRNESS.

11.   IN RECENT YEARS, ANY TAX ADVANTAGE HAS BEEN TAKEN AWAY FROM US SO THAT THIS SHOULD NOT GET IN THE WAY FROM PROVIDING SUPPORT TO US

12.   THAT TO SPEED UP THE RECOVERY- WHEN IT COMES - WE ARE NEEDED TO KEEP THE UK’S ENTREPRENEURIAL SPIRIT ALIVE AND KICKING

 

Accountants can easily verify this in a straight-forward income support grant for 80% of our declared or projected income or Company profits up to £2500 ( similar to that required to get a BBL) , and the ability to work in line with SEISS, and claw back later should any erroneous claims be made.

 

Treasury Select Committee - We thank Mel Stride for placing pressure on the Treasury and fighting our corner and await the proposals Mel Stride requested from Beth Russell to support the #ForgottenLtd.

Treasury Select Committee - Andy Chamberlain - IPSE Director of Policy was charged by Mel Stride to come back with their (IPSE) proposed solutions. Thanks to Andy Chamberlain and Mel Stride. https://www.parliamentlive.tv/Event/Index/2e7222ab-76b1-48b6-bbe0-52e5203d5293

Paul Scully – Business Minister – asked for our proposals as to how dividend income could be factored into Income Support for us – and this below was our suggestion sent to him :-

Owners of small businesses that use dividends as a form of payment could be classified into three groups:

 

Group 1:

 

Owners that pay themselves exclusively through dividends and perhaps don’t even run a payroll (we gathered from you that this is how you used to operate). It follows that these companies are unlikely (although not impossible) to have shareholders that are merely investors in the company and do not do any work for the company.

 


Group 2:

 

Owners that pay themselves through a mixture of salary and dividends and are the only shareholders in the business (we fall into this category).

 

Group 3:

 

Owners that pay themselves through a mixture of salary and dividends but are not the only shareholders in the business.

 

The only way to find out which group people fall into is to combine data held by HMRC and Companies House. As the company applying for support has all the information needed it would seem that a simple portal to apply for support could be built relatively quickly and the information given cross checked with data from HMRC and Companies House. The information from Companies House should be the most straight forward as it is publicly available. HMRC data on the other had is confidential and therefore will need special permissions to access. Looking at each group in turn:

 

Group 1:

 

The claimants would need to enter their company number, company tax number and all shareholders claiming support and the level of support (capped at £2,500) plus the tax number of each claimant (this could possibly be used to credit and pay each claimant too on a monthly basis).

 

Checks:

 

1.       Check dividends declared in accounts submitted to HMRC to verify dividends claimed (Companies House accounts may only have a balance sheet so may not have dividend information)

2.       Check individuals tax returns for level of dividends against claimed (this is just a check that at least this level of dividends has been received by claimant as dividends from other sources are not broken down in the tax return)

3.       Check Companies House data to verify all shareholders are claimants and visa versa.

4.       Check HMRC data to verify that company is not registered for PAYE.

 

 

Group 2:

 

The claimants would need to enter their company number, company tax number, company PAYE number and all shareholders with tax numbers and Employee Numbers claiming support and the level of support (capped at £2,500 and broken down into pay or furlough pay and dividends). The tax number of each claimant could possibly be used to credit and pay each claimant too on a monthly basis.

 

Checks:

 

1.       Check combination of Salary cost claimed and dividends is below £2,500.

2.       Check declared salary cost is the same as PAYE data submitted to HMRC.

 


3.       Check dividends declared in accounts submitted to HMRC to verify dividends claimed (Companies House accounts may only have a balance sheet so may not have dividend information)

4.       Check individuals tax returns for level of dividends against claimed (this is just a check that at least this level of dividends has been received by claimant as dividends from other sources are not broken down in the tax return)

5.       Check Companies House data to verify all shareholders are claimants and visa versa.

 

 

Group 3:

 

The claimants would need to enter their company number, company tax number, company PAYE number and all shareholders with tax numbers and Employee Numbers claiming support and the level of support (capped at £2,500 and broken down into pay or furlough pay and dividends). The tax number of each claimant could possibly be used to credit and pay each claimant too on a monthly basis. They also need to enter non-claiming shareholders.

 

Checks:

 

1.       Check combination of Salary cost claimed and dividends is below £2,500.

2.       Check declared salary cost is the same as PAYE data submitted to HMRC.

3.       Check dividends declared in accounts submitted to HMRC to verify dividends claimed (Companies House accounts may only have a balance sheet so may not have dividend information)

4.       Check individuals tax returns for level of dividends against claimed (this is just a check that at least this level of dividends has been received by claimant as dividends from other sources are not broken down in the tax return)

5.       Check Companies House data to verify all shareholders that are claimants are registered for PAYE and non-claimant shareholders are not.

I’m sure the above categories will not cover each and every situation that is in legitimate need of support but I believe that it should cover the majority. It may be that companies claiming support will need to demonstrate in future that they suffered a very significant drop in revenue during this period if the amount given in support is not to be repayable by the company (i.e. to stop businesses that have not been affected claiming). There may also be exclusions in terms of the types of company eligible to claim.

 

Currently many Directors who pay themselves a small salary, will only receive approx. £585 per month under the JRS, which is not enough to pay our business expenses, let alone put food on our tables. And even worse, those Directors who take no PAYE salary, get nothing. We are told by the Government to apply for Universal Credit, which takes into account Dividend income, and is minimal at best, if you qualify.  We would also like to point out that dividend income could not currently exist for us, given the pandemic.

 

 

Evidence of support for our plight is growing with OVER 341,000 Supporting THE CHANGE ORG PETITION, through the EARLY DAYS MOTION #351, which has increased to 44 MP’s – we are actively asking our MP’s to sign this EDM, to show their support.

 


https://edm.parliament.uk/early-day-motion/56824/support-for-small-limited- companies?fbclid=IwAR141XR-u4_CC3e8iRKpjYTZDsShxaHBHKP2skNh2cjfd6QmDSTVTAfUQ3M

 

Within the 20% tax bracket, there is very little advantage of earning through dividends. Based on, say a £30k limit for Covid19 purposes – the difference is £661. The reasons individuals take this route for their business are circumstantial, including coping with fluctuating cashflow, protecting ourselves from unlimited liability. It is NOT to avoid paying tax to the Government.

 

We do not appreciate and find it an outrage being CALLED “Tax Dodgers” when OUR structure is perfectly legal and operating to HMRC rules, when in fact, we contribute 2.2 Trillion pounds in tax year-on-year to the economy, employing 16.6 Million people through our drive, selfless sacrifices, and ethical approach to the way we work.

 

We are deeply saddened that first we were shut out of any substantive income support by government - and then were told that we are tax dodgers. We WERE all in this together before this pandemic when we paid our taxes and collected VAT. Although not NOW, as unlike the rest of the self-employed, we have been left behind. We SMALL company director/ workers ask government to provide us with GRANTS WHICH WE NOW URGENTLY NEED - AND NOT DEBT – BEFORE WE ARE

FORCED TO CLOSE DOWN and retrench our staff.

 

Dividend income is included as part of any financial questionnaire where applications for Universal Credit, Mortgages, University Grants are concerned. Therefore, Dividend income should NOT now be EXCLUDED for income support when it is MOST needed during this CRISIS.

 

Two Million Business Owner Directors, and their staff will be adversely affected by not receiving the same income support that 95% of the rest of the UK are receiving. Their furloughed staff will be laid off or, made redundant – this has already begun – we are already seeing evidence of this in other sectors. We reiterate, many of us are a One-Person-Band Director/WORKERS and that we too are self-employed. Not only will the economy hit depression when our businesses collapse and jobs are lost, millions of individuals will also hit depression not knowing how they will feed their families and pay their bills. Loans are NOT the answer, they are NOT viable and are unacceptable - we need INCOME support just like the Self-employed, NOT debt. Financially, like other sole traders, we small limited company Director/Workers are only as good as our last month’s income.

 

We ask you to take note of Mel Stride, Ed Davey, Jamie Stone, Paul Scully, Andy Slaughter , Harriet Harman, Jonathan Edwards, Jim Shannon, Alison Thewliss’, Andrew Selous and Caroline Lucas’s support - amongst many other MPs -who support our request to government for income support on the same basis as the rest of the self-employed.

Please Support these Directors who in turn will be enabled to continue to support their company, and just as important, support their workers through these unprecedented times before it is too late. This is a crisis within a crisis, we implore you to listen and take the right and proper action for fairness to all Small Businesses.

 

We call on you Boris Johnson (PRIME MINISTER), Rishi Sunak, Alok Sharma, Keir Starmer and Ed Davey (THE LEADERS OF THE LABOUR AND LIBERAL DEMOCRAT PARTIES), HM Treasury, HMRC - The

Government - to do the right, fair and proper thing. This is a cross-party issue for fairness. Please acknowledge receipt of this letter and await in anticipation of your response.

 

May 2020

 


 

Written evidence submitted anonymously

 

As the owner, sole director and only employee of my own Personal Service Limited Company I am dismayed and disgusted with the discrimination of the Government towards limited company directors when it comes to financial support during the Covid-19 pandemic.

I work in the sports broadcasting industry, which was one of the first to be closed down, and yet I, along with many other freelancers in TV who work through their own limited company as the sole employee, have been unable to receive any financial support, unlike those who are employees or self-employed. At the time of writing (11th May) I have earnt precisely £0 since March 15th, whilst being ineligible for any form of state support.

 

All of my many clients are prominent blue-chip companies and institutions, and many insist that I provide my services to them via a Personal Service Company. All my work is done through my company, and I pay corporation tax, dividend tax, VAT and personal tax, which together amounted to almost £25k last year. As I work in various locations in the UK and around the world I do not have business premises, but like thousands of others, work from home.

I found it scandalous when the Government painted a picture of all limited company directors being “tax-dodgers” and when the Chancellor suggested that freelance journalists had an average income of around £200k a year. Absolute rubbish, firstly my company was established in 2003, and has always paid tax, and secondly I know no-one in my line of work who earns that much per annum.

 

As a last resort I applied to furlough myself from my own company, only to be informed by my accountant that I was ineligible to do so. This is because the annual payroll for my company was carried out at the end of March, as it has been since my company was formed and began to employ me as the sole employee seventeen years ago.

According to my accountant, HMRC did not make public that the electronic RTI submission (the way the PAYE is communicated to HMRC) relating to the 19/20 tax year had to be done by 19 March. He queried this, and HMRC then quoted from their own internal guidance to explain why I could not furlough myself. How on earth can they justify this, when it was never in the public domain? I am not alone, many hard working directors of their own one person limited companies are also unfairly excluded. My accountant says, “We are perplexed by the omission of key eligibility criteria from the official guidance.”

The Chancellor stated that we were all in this together, and that no one would be left behind. This is simply not the case. Those who are employed and self-employed can receive financial assistance, and the self-employed can continue to work if they are able to. If I had been successful in furloughing myself, I would not have been able to do anything other than statutory duties for my company.

The Government instead said companies could apply for a loan. Loans for personal service companies are not the answer, my company only supplies my services, and unlike manufacturing for example it is not possible to just simply increase productivity. Also my ability to repay a loan is dependent upon sports fixtures in the coming year and all the major events I was booked to work on in 2020 have been cancelled.

The disparity in support available between the employed, the self-employed, and the one person trading through their own limited company, who are freelance, is discriminatory, and totally unfair.

 

 

May 2020

 


 

Written evidence submitted anonymously

A gap in Assistance for the Events Industry.

There has been additional assistance given by the Government to the Leisure, Tourism and Hospitality industries because of the disastrous effects that Covid 19 have had on these industries. However, Event experts and suppliers supply these industries. Therefore our industry overnight went crashing to zero income from March 2020. Unlike many other industries we are not earning any income during this very difficult period. Events do not and will not occur for approx. 6 months.

We request that the committee give special attention to the £35 billion of revenue that the Events industry bring to the UK economy each year, the events industry in the UK is regarded as one of the best in the world. London is often a preferred Event location for many industries holding their events worldwide, but this industry need long term help of grants to survive. Many event companies are within serviced offices so do not pay business rates directly and so they have found no help.

This industry will not survive and continue to be one of the best in the world unless further help is given through grants. For the committee to consider that the Events industry are fundamental to tourism and hospitality to recover. The government has not directly recognised this huge profit making industry because there is not one SIC code to identify us properly.

We anticipate that the Events industry will not be able to survive the next 6 months of zero income unless assistance is given to help our industry survive.

 

 

May 2020

 


Written evidence submitted anonymously

 

I was working for an agency from September through to December 2019 and then after Christmas I was ask back from the company if I could return again which was dealt through the same agency which finished on the 20th March 2020 because as the agency stated that I had completed my assignment at the company so I was no longer needed.

 

I heard from one of the people I used to work for that the company had ceased working due to the coronavirus pandemic so I contacted the agency and they were quite adamant that because I had completed my assignment I was not entitled to be furloughed which the government were trying to get them places to do due to the pandemic.

 

I have been watching the Martin Lewis in a hope that this would change and also the government statue on the situation so that I could inform the agency so they could change there stance, which the government has published but the agency are still adamant they will not furlough and it is up to them if they will or will not allow, which they are still stating adamant they will not allow.

 

I myself cannot look for other jobs during this period of time because I have contact with elderly parents at my place and I can’t put them at risk as I get them food in from the shops and I was also getting there prescriptions from the doctors until recently, also the fact that I am at the at risk category as well due to my health problems which I have had since I was 10 when I was involved in a RTA when I was 10 which left me in a coma for 2 weeks on a life support machine.

 

I have asked the agency to do the right thing and furlough but they won’t as they state that they are only a small agency and they can not afford to fork out the money to pay but I have said the government will pay, they have asked me not to send them documents through about the government views or any other info which I think is wrong.

 

I have kept all the email correspondence from both parties so if you would like the details I could provide as proof but I don’t see why they should get away with doing what they are doing at this time due to the pandemic as there are thousands of people in the same position as I am.

 

May 2020

 


 

Written evidence submitted anonymously

 

 

It has been a week since I have tried to apply for the BBL with my bank Barclays but until today I have been very poorly treated, lied to by the bank saying that for some customers it works and for others it does not. when in fact they are screening each applicant.

 

My business is eligible but barclays does not play by the books as told by the British Business bank and credit check and screen customers.

 

Why would they need to visit our site otherwise?

 

For evidence, please see footprint of Barclays visit of my company web site [not published].

 

May 2020

 


 

Written evidence submitted anonymously

Job Protection Scheme and Self-employment Income Support Scheme Response to item 1

Unable to claim any support from Job Protection Scheme as left old employment on 26/03/20 was

due to commence new employment on 01/04/20. My new employer deferred my start date by one month and it has been deferred again until June.

 

I asked my old employer to re-employ but would not do so. They admitted that the most recent information from the HMRC stated they could re-employ employees who left employment after the 28th February, but in the same guidance it clearly states that:

 

 

 

 

Please look into the points raised above, there is a large number of individuals in the same position as myself.

 

Why is Government not making it compulsory to re-employ and furlough and removing the reasons quoted above for those in my situation or allowing the new employers to have honoured the job offers issued and furloughed.

It is not good enough that people through no fault of there own have fallen between this large gap. Response to item 4

Speaking from personal experience I have found it difficult to access any support as I applied for new

style new job seekers allowance on 31/03/20 and to date have not received anything.

 

Response to item 7

There is a large gap as per item 1 an urgent review and amendment is required ensuring those who were changing employment get support from either their old employer or the new employer. This could be critical for some families and needs addressing urgently. The token change of date to March is not sufficient.

Other government intervention Response to item 1

The Government do need to intervene and actively resource the benefits agency to allow swift processing of claims.

 

May 2020

 


 

Written evidence submitted anonymously

 

Small Limited Companies Excluded from Government Support – Covid-19 Crisis

 

I set up my company, […], in June 2010. After 20 years as a sought-after artworker and retoucher on the London reprographics arena; also managing the studios for most of the firms I worked for, I decided, in 2010 that I needed a change of scenery and decided to go freelance. I wanted to see how other top advertising studios worked, by working in each for a short time. This wasn’t a gamble. If it didn’t work out. At the time I had plenty of job offers to go back to.

 

Advertising agencies, recruitment agencies and design studios did not want to deal with sole traders. They did not then and today they still do not. So I was forced to incorporate as Limited Company. To be frank, I didn’t care what system I had to work within as long as I was paid for the work I did. That was only fair. I saw it as a mechanism to work and I have followed all the rules and paid everything due, on or before time. Tomorrow my VAT will be taken by direct debit. I could defer it, but it just means debt to take on.

 

My work can take me all over Europe making sure customers’ branding is printed perfectly. I also retouch images for some photographic studios as well as produce artwork for a whole swathe of marketing and exhibition materials. I had a good small business until the outbreak of Covid-19. It did allow me to have a good work-life balance and I was able to support family and sometimes friends going through a tough time.

 

So has Covid-19 affected my business. Yes. A big yes! Suddenly all work I had booked-in up to Christmas 2020 was pulled, cancelled, shelved. Is there a chance of any of this coming back? I’m hoping so. But some for sure will not. A main customer who gave me most work recently has shut their 7 high street shops; these will not reopen. One-man-band photographers are like me, unsupported and some are closing studios for good and making assistants redundant. Because of social distancing, photography studios cannot hire models or make-up artists, this means there is hardly any model photography being taken and therefore this impacts my work.

Brand clients are understandably not asking me to undertake air travel to Europe. I doubt mainland Europe will want Brits travelling to their countries whilst we still have high Covid-19 numbers, so this revenue stream may never recover for me.

 

My business is my only source of income to pay rent, council tax, food, other household bills.

 

I pay myself through a mixture of a small salary and when profitability allows, dividends. If I furlough myself under the current rules, then I cannot take any work should I get a phone call. As a director I would be shirking my duties to put myself in a position where I cannot support the business. I personally have been left out of any support programmes.

 

The Chancellor has offered business loans on favourable terms. But still loans. As a director with no ability to forecast work projects and profits to replay the loan, I am not taking a business loan.

Personally I would rather sleep on the streets than take the business into a debt situation. Debt is not good for your mind. I’ve been in debt, I recovered from debt. I’ve lost friends to suicide because they were in debt. I will not be taken into that place. Taking on debt is a gamble. This Chancellor is forcing fellow Directors to take this gamble. The gamble is their life. Forcing debt is just plain wrong!

 

Also I must point out that Government are paying their own ‘Contingent Workers’ that have been impacted by COVID-19 payments of 80% up to a maximum of £2,500 and that they state that “This

 


approach should be applied to all categories of Contingent Workers including: ● PAYE; ● Umbrella;

  Personal Services Company.’

 

Please see below from the document assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/88131 4/PPN02_20-Contingent-Workers-Impacted-by-Covid-19-April 1_.pdf

---

Purpose of the Guidance notes for Payments to Suppliers for Contingent Workers impacted by COVID-19

 

The purpose of the Guidance notes for Payments to Suppliers for Contingent Workers is to provide measures that contracting authorities can use to implement with Contingent Workers who have been affected by COVID-19. These measures aim to protect:

 

  the livelihood of Contingent Workers and avoiding claims of unnecessary Statutory Sick Pay from

the Supply Chain;

 

  against the risk that some may attend work when they should be self-isolating, thereby potentially infecting wider teams and the broader general public;

 

  against the risk of losing critical workers to jobs in other sectors because they are not getting paid;

 

  Supplier revenue with the intention of keeping them solvent so they remain a part of our ongoing

supply chain in the future.

 

---

 

Is it fair that the Government, flush with our taxes, can choose to pay PSCs and others, that this Government deems a Contingent Worker and not force then to furlough? Pay Limited companies it chooses a wage of sorts. Not force their owners to live off scraps or indeed nothing; unlike thousands of Forgotten Limited companies?

 

I would like to see the Government play fair. Or at least admit to Limited Company Directors that they have been forgotten and will be left behind. At least then we will know what cards we are dealt.

 

All I ask for is parity with other tax-paying members of the public and parity with the self-employed; who can receive up to £2500 per month in a grant and continue to generate further income by working.

 

I expect that all taxpayers will be expected to contribute when paying back these government schemes. Where is the fairness here?

 

I expect that the MPs generally see small business as the lifeblood of the economy. Bloodletting was proved ineffective decades ago. Please don’t kill us off. We want to work, we want to contribute, but we would like parity and fairness.

 

 

We ASK YOU Boris Johnson, Rishi Sunak, Alok Sharma, Keir Starmer, Ed Davey, HM Treasury, HMRC - the Government, to acknowledge that Dividends received by the directors of micro entity Limited Companies CAN and WILL be differentiated from that of other Investment income (which in nearly all cases doesn’t exist).

 


 

Jonathan Geldart of the IoD wrote to MP’s in his press release of 17th April, saying, “Include company dividends earnings in income support”.

https://www.iod.com/news-campaigns/press-office/details/IoD-calls-on-MPs-to-support-small- company-directors

 

Mr Geldart, in his article in the Daily Telegraph dated 9th April 2020, points out that we Small Limited Company Director/Workers are:

1.       TWO MILLION PEOPLE RUNNING THEIR OWN BUSINESSES

2.       NOT THE “FAT CATS” THAT THE WORD “DIRECTOR” CONJURES UP

3.       THAT SOME OF US HAVE PUT A LIFETIME OF EFFORT IN TO OUR SMALL BUSINESS - WHETHER FOR EXAMPLE THAT’S AN, ACCOUNTANT, SOLICITOR, IT PROFESSIONAL, DESIGNER, ARCHITECT, PHOTOGRAPHER, ELECTRICIAN, PLUMBER, CARPENTER, ROOFER, BUILDER OR CAMERAMAN, to name but a few

4.       THAT MANY OF US TAKE ONLY THE BARE MIMINUM IN PAYE SALARY AS OUR INCOME IS ENTIRELY DEPENDENT ON THE BUSINESS WE CAN DRUM UP, AND ONLY TAKE INCOME AS DIVIDENDS WHEN THERE IS A PROFIT

5.       THAT MANY OF US ALSO, WHO ARE NOT PAID THROUGH PAYE, ARE PAID FULLY BY DIVIDEND ONLY AS OUR INCOME, IS ENTIRELY DEPENDENT ON THE BUSINESS WE CAN DRUM UP, AND ONLY TAKE INCOME AS DIVIDENDS WHEN THERE IS A PROFIT

6.       THAT THE GOVERNMENT’S RETENTION SCHEME DOES NOT COVER DIVIDENDS LEAVING US “HIGH AND DRY” AND THAT THIS NEEDS TO CHANGE

7.       ANY DIFFICULTY IN SEPARATING DIVIDEND INCOME FROM INVESTMENT INCOME FOR SHAREHOLDERS IS SUMOUNTABLE AS A PAPER TRAIL EXISTS and can be proven

8.       EVIDENCE OF OUR DIVIDEND INCOME IS IN OUR PERSONAL TAX RETURNS AND DIVIDEND VOUCHERS SO HMRC CAN DEDUCE ELIGIBILITY

9.       IT IS BETTER LATE THAN NEVER TO HELP US

10.   THAT THERE IS SIMPLE SOLUTION AVAILABLE HERE FOR GOVERNMENT WHICH IS THE “PAY FIRST, CHECK LATER” OR THE “CLAW-BACK METHOD”, ALSO PROPOSED BY MEL STRIDE MP AS A SOLUTION TO FIND FAIRNESS.

11.   IN RECENT YEARS, ANY TAX ADVANTAGE HAS BEEN TAKEN AWAY FROM US SO THAT THIS SHOULD NOT GET IN THE WAY FROM PROVIDING SUPPORT TO US

12.   THAT TO SPEED UP THE RECOVERY- WHEN IT COMES - WE ARE NEEDED TO KEEP THE UK’S ENTREPRENEURIAL SPIRIT ALIVE AND KICKING

 

A solicitor or an accountant can easily verify this in a straight-forward income support grant for 80% of our declared or projected income or Company profits up to £2500 (similar to that required to get a BBL), and the ability to work in line with SEISS, and claw back later should any erroneous claims be made.

 

Treasury Select Committee – We thank Mel Stride for placing pressure on the Treasury and fighting our corner and await the proposals Mel Stride requested from Beth Russell to support the #ForgottenLtd.

 

Treasury Select Committee – Andy Chamberlain – IPSE Director of Policy was charged by Mel Stride to come back with their (IPSE) proposed solutions. Thanks to Andy Chamberlain and Mel Stride. https://www.parliamentlive.tv/Event/Index/2e7222ab-76b1-48b6-bbe0-52e5203d5293

Paul Scully – Business Minister – asked for our proposals as to how dividend income could be factored into Income Support for us – and this is our response - and to point out that dividend income does not currently exist for us, given the pandemic.

 


Currently many Directors who pay themselves a small salary, will only receive approx £585 per month under the JRS, which is not enough to pay our business expenses, let alone put food on our tables. And even worse, those Directors who take no PAYE salary or an annual salary get nothing.

 

We are told by the Government to apply for Universal Credit, which takes into account Dividend income, and is minimal at best, if you qualify. We are mostly one or two-person-bands, working from home – no other grants are available to us. We ask for fairness and to receive proper income in exactly the same way as other self-employed people.

 

Evidence of support for our plight is growing with OVER 341,000 Supporting THE CHANGE ORG PETITION, through the EARLY DAYS MOTION #351, which has increased to 44 MP’s – we are actively asking our MP’s to sign this EDM, to show their support.

https://edm.parliament.uk/early-day-motion/56824/support-for-small-limited- companies?fbclid=IwAR141XR-u4_CC3e8iRKpjYTZDsShxaHBHKP2skNh2cjfd6QmDSTVTAfUQ3M

 

Within the 20% tax bracket, there is very little advantage of earning through dividends. Based on, say a £30k limit for Covid19 purposes – the difference is £661. The reasons individuals take this route for their business are circumstantial, including protecting ourselves from unlimited liability, and NOT to avoid paying tax to the Government.

 

We do not appreciate and find it an outrage being CALLED “Tax Dodgers” when OUR structure is perfectly legal and operating to HMRC rules, when in fact, we contribute 2.2 Trillion pounds in tax year-on-year to the economy, employing 16.6 Million people through our drive, selfless sacrifices, and ethical approach to the way we work.

 

A case in point: Lord Adonis supported Lord Agnew’s comment that our dividend was not income and tweeted that Agnew right to say that HMG will not compensate People in Covid-19 Schemes who take income in the form of dividends – they are mostly tax dodgers and they chose to do this”. This unfair comment on social media was upsetting to hard working and tax paying director/ workers.

 

We are deeply saddened that first we were shut out of any substantive income support by government - and then were told that we are tax dodgers. We WERE all in this together before this pandemic when we paid our taxes and collected VAT. Although not NOW, as unlike the rest of the self-employed, we have been left behind. We SMALL company director/ workers ask government to provide us with GRANTS WHICH WE NOW URGENTLY NEED - AND NOT DEBT – BEFORE WE ARE FORCED TO CLOSE DOWN.

 

Dividend income is included as part of any financial questionnaire where applications for Universal Credit, Mortgages, University Grants are concerned. Therefore, Dividend income should NOT now be EXCLUDED for income support when it is MOST needed during this CRISIS.

 

Two Million Business Owner Directors, and their staff will be adversely affected by not receiving the same income support that 95% of the rest of the UK are receiving. Their furloughed staff will be laid off or, made redundant – this has already begun – we are already seeing evidence of this in other sectors. We reiterate, many of us are a One-Person-Band Director/WORKERS and that we too are self-employed. Not only will the economy hit depression when our businesses collapse and jobs are lost, millions of individuals will also hit depression not knowing how they will feed their families and pay their bills. Loans are NOT the answer, they are NOT viable and are unacceptable - we need INCOME support just like the Self-employed, NOT debt. Financially, like other sole traders, we small limited company Director/Workers are only as good as our last month’s income.