Covid-19: Self-employed

Debate between Lord Agnew of Oulton and Baroness Young of Old Scone

Thursday 23rd April 2020 Lords Chamber

[Lord Agnew of Oulton]

My Lords, the policy for the proprietor of a business to take a dividend is a personal one. It is done largely to mitigate employers’ national insurance, so I do not believe that it is right for the Government to look at that as a form of income. A dividend is defined as the surplus of a business after all its expenses have been paid, profits retained and taxes paid. While we will keep an open mind, I do not think this is something we will be dealing with urgently.

[Baroness Young of Old Scone (Lab)]

The answer the Minister has just given is tremendously inadequate for many very small businesses that were advised by reputable accountants that this was the most tax-efficient way of taking, in many cases, very small levels of income from tiny businesses. I really must press the Minister. These people are not eligible for the self-employment income support scheme, find themselves now without any income, have commitments and are often operating on such tiny margins that taking out a loan is really out of the question in the medium term. Can the Minister tell us how many of these left-behind small businesses there are and what the Government will do urgently to address this and help them out, and when? It is simply not satisfactory to say, “They made that choice in the past, and now they must reap the detriment as a result.” This is very unfair.

[Lord Agnew of Oulton]

My Lords, I will not repeat the arguments I made in an earlier response. We will of course keep it under review. Some 11 measures have been made available for a variety of self-employed people and businesses. I will not list them all now, but there is a pretty strong safety net. If there is evidence that some are falling through that net, we will of course keep an open mind.