Self-employed denied Covid aid 'need support' says top accountant
- Credit: Lovewell Blake
A leading East Anglian accountant is calling for retrospective support for self-employed people left high and dry during the coronavirus crisis.
James Shipp is a partner at accountancy firm Lovewell Blake which is supporting this paper's Fightback East campaign urging the government to back its manifesto to help the region to recover from the effects of the pandemic.
Mr Shipp argues that the self-employed who started trading after March 2019 and fell through the cracks for government support are the very people which will help lead the eastern region towards recovery once the pandemic subsides.
He has written to the Treasury to demand that these businesses are not just made eligible for future tranches of help, but that they should receive retrospective support as well.
“When the Self-Employment Income Support Scheme was first introduced last year, HMRC stipulated that to be eligible, traders needed to have demonstrated that they had been trading in the 2018/19 tax year via their tax return,” he said.
“Now, nearly a year later, those who started trading after March 2019 will be submitting 2019/20 tax returns, and so can demonstrate that their claims are bona fide.
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“So far these people have received no help at all. If they have taken out Bounce Back Loans then they will have to start repaying these shortly; and they may be facing higher mortgage payments if they were forced to take a mortgage payment holiday to survive.
“Now that 2019/20 tax returns are being submitted, a retrospective grant – perhaps with a clawback mechanism for those attempting to exploit the scheme – should be considered."
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At the very minimum they should be included in the third and fourth tranches of support covering the current lockdown, he argued.
“I’m not talking about small company directors, who also suffered due to gaps in the furlough scheme, but sole traders and members of small partnerships who pay their income tax and Class 2 and 4 National Insurance contributions, but who have received no support from government to assist them where they have been affected by Covid," he added.
“Many of these small businesses will be the drivers of economic recovery after the pandemic. It is crucial that they are supported so that they are still around to help the region’s economic fightback in the coming months and years.”
The Self-Employment Income Support Scheme is open to self-employed individuals or members of partnerships who have traded in both 2018/19 and 2019/20, and who have either suffered reduced demand due to coronavirus or have been temporarily unable to trade at all.
The third tranche of support covers the period November 1, 2020, to January 29, 2021, and consists of a payment worth 80% of average quarterly trading profits, with a £7,500 cap. Applications for the third tranche of support close on January 29. More details here