I welcome that measures have been announced to help self-employed people, many of whom are especially vulnerable during this time.
I welcome the SEISS Grant Extension, which will provide critical support to the self-employed at a level similar to the new Jobs Support Scheme. The initial extension grant will cover 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. I also welcome that, from January, outstanding income tax self-assessment payments can be extended for 12 months.
I understand that the Treasury will review the level of the February-April grant and set this in due course and I have passed on your comments to my colleagues at the Treasury such that they are aware of the strength of feeling on this issue.
The SEISS Grant Extension follows the previous extension whereby self-employed individuals can qualify for a second taxable grant, with the scheme having reopened for applications on 17 August 2020 and closing on 19 October 2020.
I am sorry to say that people who pay themselves through a mixture of salary and dividends will find that dividends are not covered by the Self-Employed Scheme. I understand that it would be very difficult to know whether any dividend payments derived from an individual’s own company or dividends from other sources. I realise this may not be the response you wanted to hear, but I hope its comes as a reassurance that if you are paid a salary as a company director by PAYE, then you can be furloughed for the Coronavirus Job Retention Scheme.
Colleagues at the Treasury assure me that the £50,000 threshold was chosen after careful consideration, to ensure the help available is targeted at the most vulnerable individuals during this crisis. My understanding is that this threshold ensures that 95 per cent of those who are majority self-employed are covered by the scheme. I realise this may not be the response you wanted to hear, but I understand that as help is available through Universal Credit, anybody who has not met the qualifying criteria for SEISS and is genuinely in need should be able to claim through Universal Credit.
I hope that these measures come as a welcome relief to those in self-employment who have been put in a difficult position during this crisis.