The SEISS fourth grant has already been confirmed after the scheme was extended three times, with details of the programme expected in Chancellor Rishi Sunak’s upcoming Budget on Wednesday, March 3. The period of time for the fourth grant will count self-employed worker’s earnings from February to April 2021, meaning the cover has been in place for the vast majority of the 2020/2021 tax year. But while the scheme has undoubtedly saved some people’s lives amid their businesses being forced to stop trading, thousands have been left without any support at all.
From photographers to DJs, to freelance personal trainers and taxi drivers, countless self-employed professions have been hit hard by the pandemic.
Official data shows of an estimated five million people who categorised themselves as self-employed at the beginning of the pandemic – including 800,000 owner-managers of limited companies – almost 500,000 had found themselves out of work by the time summer hit.
Although the Government has spent a staggering £13.7billion on its SEISS schemes since March, which equates to around twice as much per person as it has spent on furlough, the help has been very poorly targeted.
Research by the Resolution Foundation suggests 435,000 people were left unable to claim the grant covering 80 percent of their usual income.
To make matters worse, 500,000 people never received any support at all even though they were still out of work by September.
It’s difficult to tell exactly how many people have called through the cracks of the Treasury’s support, but up to three million would not have qualified for the main income support schemes if they lost work, according to estimates by the National Audit Office.
An estimated one million were ineligible for furlough because they were short-term contractors moving between jobs or small company directors who draw most of their income in the form of dividends.
Up to two million don’t qualify for SEISS support either because less than half of their recent income was from self-employment; they became self-employed too recently to have the necessary tax records or they fall within a small minority whose income exceeded the £50,000 limit.
Partner of private clients at Crowe UK, Simon Warne, told Express.co.uk: “As the third national lockdown continues, and with pupils’ return to schools delayed until March at the earliest, many self employed people will continue to endure both homeschooling and a worsening personal financial position.
“The level and conditions of the fourth grant have yet to be set and the announcement of those conditions will not be made until March 3, the date of Rishi Sunak’s second Budget.
“The delay perhaps hints at some good news approaching.
“Some have said the SEISS support measures don’t go far enough and point to gaps – notably the recently self-employed, those who earned more than £50k on average and directors who operate through personal service companies and lived on dividends.”
Mr Crowe said the group who can hope for the most change is likely to be the recently self-employed, of which an estimated 300,000 have already filed their 2019/2020 self-assessment return.
In addition, the expert says the new grant could include the latest round of tax filings as a basis for a wider access to the SEISS scheme.
In bad news, however, Mr Crowe said there could be some cuts to self-employed allowances: “Additional support for the others who were ‘left out’ does not seem to be forthcoming any time soon.
“The tax breaks historically enjoyed by directors of personal service companies, including lower personal taxation on dividends and a low National Insurance bill may be examined in the forthcoming Budget of March 3 as the Chancellor begins to claw back some of the huge expenditure outlay.”
Mr Crowe says Mr Sunak’s 2020 Budget will be the “most interesting one for years”, and undoubtedly, the self-employed will be looking forward to receiving some clarity on the future of their finances.