Self-employed support scheme is 'smoke and mirrors' say limited company bosses
Small businesses and founders of limited companies have today spoke of their disappointment following the budget announcement by Chancellor Rishi Sunak.
Small businesses and founders of limited companies have today spoke of their disappointment following the budget announcement by Chancellor Rishi Sunak
Many that still remain shut out from the Government bail-outs have raised concerns over their survival as the coronavirus crisis continues.
The news comes as 600,000 more people were set to be eligible for the fourth round of the self-employment support schemes, with applications opening next month.
One of the big criticisms of the self-employed income support scheme previously was that it excluded many newly self-employed, due to strict eligibility criterias.
But Lynn Thomas, 55, from Kirkham, founder of LHT Consulting Ltd, a limited company that offers leadership coaching, spoke of how her business is now in liquidation due to a lack of financial support in the pandemic.
She said: "The self employed aspect is a bit smoke and mirrors, because most of the newly self employed did not earn enough to qualify for much from the grant.
"I would imagine that most of the 600,000 people wouldn't qualify for much especially when they have had no income for a year. It is desperate times for many.
"It is a disgrace that people who have worked and paid tax all their lives receive no support through this difficult time. There should be a minimum amount paid if you cannot qualify for the grants given.
"Why pay big corporates furlough when they don't need it as much as families with children who receive nothing? Many entrepreneurs are needed to feed the restoration of the economy, it just doesn't make sense. It is a big social injustice to starve the very people who pay their taxes.
"The country has been bankrupted and I think we will be paying for many years to come."
Limited companies were differentiated from other small businesses during the coronavirus crisis by the Government, offering them just 80 percent of what the businesses process through PAYE.
It was announced today that the rate of corporation tax will rise to 25 per cent by 2023, but with protections for smaller businesses.
John Devereux, owner of Orbit Satellite Installations LTD in Preston, and is among the many one-man and small business owners who feel they remain ignored by the Government.
He claims that small limited companies should be treated the same as those who are self employed, as they are only ‘limited’ under government advice.
Speaking today, he said: "There is this perception that people paid through dividends make a fotrune but it is only the big companies that are rolling in it.
"In my personal situation, this has been going on for 12 months from that and all I qualified for was the bounce back loan for businesses, which still needs to be paid back.
"My company made a loss for the first time and my company has had nothing for the whole period. Limited company directors aren't entitled to the self employed income support scheme, even if we are the only ones employed at our companies.
"Sole traders aren't only eligible for the self employment support scheme, but they can carry on working which proves for a fraudulent situation. Limited companies have to cease trading and stop earing anything just to claim 80 per cent of their PAYE wage.
"They government is perceived to be backing businesses and calling us the backbone of the country for getting things going again, but then they don't support us. The only positive I can take from today is that corporation tax will remain at 19 per cent for small businesses."
ExcludedUK is urging the government to recognise what they believe to be 'unfairness and disparities' from the exclusions in Covid-19 financial support schemes.
And ForgottenLTD continues to call on the government for fairness and equality for small limited companies excluded by these director’s income support scheme (DISS).
ExcludedUK today welcomed the extension of SEISS support with the inclusion of 2019/2020 tax returns in the calculation of trading profits but says businesses set up since 2019 will still receive minimal support.
A statement said: "ExcludedUK has been campaigning vigorously for the newly self-employed over the last year and we are pleased to see that these calls have finally been acknowledged.
"Those who have been excluded from meaningful support have now faced almost a year of decimated incomes and businesses, many who have lost their businesses, and many in the hardest-hit industries and supply chains, for whom this may be too little too late.
"For the newly self-employed to now be included in SEISS, many may not receive significant support given that it hinges on trading profits - the early years of a business may see low to no profit due to high setup costs and overheads, yet may still be completely viable, and most importantly this support does not take account of the long-term damage caused to people's personal finances and business debt over the last year.
"Not helping those affected will leave a personal debt crisis that will hang over so many for years to come, many small businesses on the brink, while equally being at odds with the wider economic recovery."
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