Chancellor urged to help a million people not covered by coronavirus business support

More than one million business owners, self-employed individuals and employees have fallen through the gaps of coronavirus support and the government must take action to help them.

That's the demand of the Treasury Committee which has published an interim report as part of its inquiry into the economic impact of coronavirus.

It said significant support measures such as the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) have been welcomed but quickly rolling out such major initiatives has "resulted in some hard edges in policy design and some critical gaps in provision".

The MPs said that two months into lockdown, many people face endure financial hardship but can't access the government's main support schemes.

It highlighted the following groups:

• The newly employed: According to the report, hundreds of thousands of people who have started a new job aren't covered by CJRS because of the criteria for when employers must have submitted payroll paperwork to HMRC. The Committee said the government extend eligibility criteria to all new starters, perhaps by extending the cut-off date to 31 March, or by accepting alternative forms of evidence of employment.

• Those newly self-employed: Many people who have started a business in the last year don't qualify for SEISS as they cannot fulfil the eligibility criteria. The Committee said the government should extend support to this group.

• Those self-employed with annual trading profits in excess of £50,000: The Committee said hundreds of thousands of people are potentially suffering due to the "arbitrary £50,000 cut-off" in SEISS. The government should remove the £50,000 cap, it said, and allow those with profits just over this cap access support.

• Directors of limited companies who take a large part of their income in dividends: Despite suggestions from groups including Enterprise Nation, director dividends are not covered by any schemes so the Committee called for a solution whereby HMRC requests additional information about the proportion of dividends that have come from company profits and from other sources with self-certification by the applicant.

• Freelancers or those on short term contracts: The Committee said it "cannot be right" that in industries such as television and theatre, where short-term PAYE contracts are the norm, many workers are not entitled to support under CJRS or SEISS. It urged the government to extend support to this group.

Mel Stride, chair of the Treasury Committee, said: "The chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.

"Overall, he has acted at impressive scale and pace. However, the Committee has identified well over a million people who - through no fault of their own - have lost livelihoods while being locked down and locked out of the main support programmes.

"If it is to be fair and completely fulfil its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps."

Image credit: HM Treasury

The latest coronavirus support information

We are keeping you updated on the latest information on how to access the government's coronavirus business support here. You can also find advice and ask a question on Enterprise Nation's coronavirus business advice hub. Follow Enterprise Nation on Twitter too for updates.