Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the effect of extending the eligibility for the Self-Employment Income Support Scheme to those whose self-employment income makes up less than 50 per cent of their annual income on the (a) cost of that scheme and (b) number of eligible claimants.

The Self-Employment Income Support Scheme (SEISS) continues to be one of the most generous self-employed COVID-19 support schemes in the world as the economy reopens.

HM Revenue & Customs (HMRC) undertook an initial assessment of the impact of requiring an individual’s trading profits to be at least equal to their non-trading income. This was set out in a letter from Jim Harra, Chief Executive and First Permanent Secretary of HMRC, to the Treasury Select Committee on 5 May 2020, which is available at https://committees.parliament.uk/publications/1151/documents/9923/default/. HMRC’s analysis of Survey of Personal Incomes (SPI) data for 2017-18 suggested that of the 5.75 million individuals deemed as having some form of self-employment in 2017-18, 1.73 million received less than half of their total income from self-employment trading profits.

The self-employed are very diverse and have a wide mix of turnover and profits, with monthly and annual variations even in normal times, and in some cases with substantial alternative forms of income too. The design of the SEISS, including the eligibility requirement that an individual’s trading profits must be no more than £50,000 and at least equal to their non-trading income, means it is targeted at those who most need it, and who are most reliant on their self-employment income.

The Chancellor of the Exchequer has said there will be no further extension or changes to the SEISS. Individuals receiving more than half their income from other sources may still be eligible for other elements of the unprecedented financial support provided by the Government. The SEISS is one element of a comprehensive package of support for individuals and businesses, including Bounce Back loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants. More information about the full range of business support measures is available at www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19.