SELF-employed workers and small business owners were among the last groups of people to be offered support from the government. Eventually, the Self-Employment Income Support Scheme (SEISS) provided some relief but the plans have faced a bumpy ride.
Self-employed grants can now be claimed by people who work for themselves which will cover 80 percent of their average monthly trading profits. The first payment will come as a single instalment and it will be capped at £7,500 in total.
The scheme has been very popular among those it affects.
In late May, it was revealed that 2.3 million claims worth £6.8billion have been claimed so far.
Due to the obvious necessity of the scheme, Rishi Sunak announced that the scheme would be extended and claimants will soon be able to receive a second grant.
The second, and final grant, will be able to be claimed in August and it will be worth 70 percent of the claimants average monthly trading profits, capped at £6,570 in total.
While many welcomed the extension, recent analysis from FreeAgent revealed that many of those affected don’t think the support goes far enough.
A survey of 1,230 small business owners, sole traders or freelancers across England, Scotland and Wales detailed that just over a third of respondents (35 percent) thought that the UK government had done enough to help small businesses deal with the impact of coronavirus.
Additionally, the statistics from the survey also revealed that:
- 49 percent of respondents have not applied for a government grant or loan because they either did not meet the criteria (40 percent), did not know whether or not they qualified (5 percent) or thought the process would be too complicated (4 percent)
- Just 44 percent said they had applied for a grant, or loan, or both
- 53 percent believe higher taxes will be introduced for the self employed
Despite these findings, the survey did highlight some good news as the majority of respondents expressed a belief that coronavirus will only have a temporary negative effect on the economy, with many of them feeling optimistic for the future.
Ed Molyneux, the co-founder and CEO at FreeAgent, provided the following comments in light of the findings: “It is very clear the devastating effect the coronavirus pandemic has had and is still having on the UK’s small businesses and self-employed.
“These are incredibly challenging times for everyone.
“Small business owners are a catalyst for innovation in the UK, but in order to survive this period, they desperately need protection and support so that they do not go under.
“The loan scheme, while seemingly positive in theory, must be accessible, and it is very concerning that many of our respondents say they haven’t applied for a loan – or don’t even know whether they qualify for one in the first place.
“While it is encouraging to see that almost a fifth of respondents believe Covid-19 will only lead to a short-lived dip in the economy, almost four fifths clearly see this as being a longer term problem for their business.
And that’s without considering the impact of any subsequent lockdowns due to a second wave of infections.”
It is worrying that many potential claimants are unsure of their eligibility.
The actual process of applying may be complicated but according to the government, there are few rules on criteria.
It is detailed on the government’s website that people can claim from the scheme if they’re a self-employed individual or a member of a partnership and all of the following apply:
- They traded in the tax year 2018 to 2019 and submitted their Self-Assessment tax return on or before 23 April 2020 for that year
- They traded in the tax year 2019 – to 2020
- They intend to continue trading in the tax year 2020 to 2021
- They engage with a trade that has been adversely affected by coronavirus