SEISS grants cannot be claimed by those who trade through a limited company or trust and other elements, such as having a child or having loans covered by the loan charge, could also impact eligibility. Those who work through their own companies can receive income through the PAYE system and/or dividends and it is this reality which has proven to be a point of contention for the Government.
In a bid to remedy these issues, the Government was urged to review self-certification tax declaration rules which are currently preventing small company directors from accessing coronavirus support.
On February 22, Henry Smith, the Conservative MP for Crawley, pushed the Chancellor for an answer on this and an official response has been issued today.
Jesse Norman, the Financial Secretary of HM Treasury, provided the following answer on behalf of the Government: “Company directors who are also owner managers can earn a salary and receive shareholder dividends from their company as part of their total remuneration package.
“Company directors who pay themselves a salary through PAYE are eligible for the Coronavirus Job Retention Scheme (CJRS), but neither the CJRS nor the Self-Employment Income Support Scheme (SEISS) cover dividends or other investment income.
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“However, it is clear that this would open up the scheme to an unacceptable risk of opportunistic fraud and criminal activity.”
Jesse concluded with the following: “Those not eligible for the CJRS and SEISS may still be eligible for other elements of the support available.
“The Universal Credit standard allowance has been temporarily increased for 2020-21 and the Minimum Income Floor relaxed for the duration of the crisis, so that where self-employed claimants’ earnings have fallen significantly, their Universal Credit award will have increased to reflect their lower earnings.
“In addition to this, they may also have access to other elements of the package, including Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.”
As it stands, the first three rounds of funding from SEISS has been paid out but the Government confirmed a fourth set of grants will be released in the coming months.
Details on the eligibility for these grants will be released “in due course” according to the state.
While Rishi Sunak and the wider Government have defended their efforts, many charities and organisations have condemned the scheme for failing to provide support to millions of ineligible claimants.
As a result of this, the likes of ExcludedUK, Pregnant Then Screwed and (the Association of Independent Professionals and the Self-Employed (IPSE) have all called for the Chancellor to amend SEISS rules.
While Rishi Sunak has refused to confirm any details, many expect the Chancellor to extend coronavirus themed support.
This could include not only SEISS but also the furlough scheme, Universal Credit uplifts and Bounce Back Loans.
On the flip side of this, many experts warn the Chancellor could pull back support as the economy recovers and introduce various tax raids.
Thus far, HM Treasury has only confirmed the following on what will be included in the Budget: “The Budget will set out the next phase of the plan to tackle the virus and protect jobs and will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR).”
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