Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will (a) review his policy on payments made under the Self Employment Income Support Scheme in order to discount average trading profits in the preceding three full tax years that were reduced as a result a self-employed woman having taken maternity leave and (b) make retrospective payments to affected women based on that revised calculation.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
Under the Self-Employment Income Support Scheme (SEISS), the Government has been able to support millions of self-employed people at scale and pace, making it one of the most generous self-employment income COVID support schemes in the world. The SEISS grant was based on data HMRC already held and could quickly and easily calculate at scale. Without this mechanism, the schemes might have run into unacceptable delay, created unmanageable manual demand, or exposed the support to fraud.
There is no way for HMRC to know the reasons why an individual’s profits may have dropped in earlier years from income tax self-assessment returns. However, by calculating the grant on average trading profits over several tax years, the SEISS supported people who saw a dip in profits for any reason.
The Government’s approach made the scheme as accessible and fair as possible, while ensuring it remained deliverable and achieved its objectives.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Court of Appeal decision in R. (on the application of Motherhood Plan) v HM Treasury [2021] EWHC 309 (Admin), published on 24 November 2021, if he will review Self-Employment Income Support Scheme (SEISS) grants given to self-employed women who have recently given birth.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Court of Appeal has confirmed that the Self-Employment Income Support Scheme (SEISS) did not unlawfully discriminate against self-employed women who had taken time away from work related to pregnancy or caring for a new baby. The Government welcomes this judgment.
Under SEISS, the Government has been able to support millions of self-employed people, at scale and pace, making it one of the most generous self-employment income COVID support schemes in the world. The SEISS grant was based on data HMRC already held and could quickly and easily calculate at scale. Without this mechanism, the schemes might have run into unacceptable delay, created unmanageable manual demand, or risked exposing our support to unacceptably high levels of error and fraud.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of expanding the Self-Employed Income Support Scheme to include self-employed company directors and homeworkers, in particular those working in the travel industry who are not eligible for current salary support schemes.
Answered by Jesse Norman
The Self-Employment Income Support Scheme (SEISS) has supported 2.9 million people, paying over £25bn across all four SEISS grants. Together, the five SEISS grants combined will have provided individual claimants with support up to £36,570, making it one of the most generous self-employment income COVID support schemes in the world.
Company directors are not self-employed and so cannot qualify for the SEISS. They have access to the CJRS if they are paid a salary through PAYE and if they meet the eligibility criteria. Those paid annually have been and are still eligible to claim, as long as they meet the relevant conditions including being notified to HMRC on an RTI submission within the relevant cut-off dates.
In designing the SEISS, the Government’s priority was to get support to the greatest number of people but in a way that guards against fraud and abuse. That meant designing a system where HMRC can automatically match the data people provide in their applications with information already in the system to verify and pay out the claim.
The Government has explored a range of options and proposals to support company directors who pay themselves through dividends. However, HMRC do not have data – as it is not needed to administer the tax system – to identify them or verify how much grant they should be awarded. This would rely solely on self-certification and would thus open any scheme up to unacceptable levels of fraud and error by organised criminals and others who would seek to exploit these schemes.
Asked by: Lyn Brown (Labour - West Ham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will make an assessment of the implications for her policies of the report, Falling Through the Net, by the Child Poverty Action Group, published on 22 June 2021.
Answered by Will Quince
The Department is committed to providing the best possible support for all Universal Credit (UC) claimants to meet their individual circumstances. Jobcentre and Service Centre staff undergo a comprehensive learning journey designed to equip them with the tools, skills and behaviours required to provide a high quality service to all claimants. Staff receive on-going learning in their roles and have access to guidance which is refreshed at regular intervals.
Every care is taken to prevent incorrect payments being made and to ensure that benefits are paid to the correct recipient; we are focused on paying people their correct entitlement from the outset of a claim. The vast majority of benefit expenditure is paid correctly, with front line staff working hard to prevent overpayments from occurring. We are constantly improving our processes and continue to invest in the use of data and analytics to identify fraud and error.
Following the introduction of the 2012 Welfare Reform Act, all overpayments of UC and new style benefits paid in excess of entitlement are recoverable. The Department seeks to recover benefit overpayments without creating undue financial hardship, and any person who does experience such hardship is encouraged to contact the Department’s Debt Management unit. Where a person cannot afford the proposed rate of repayment it may be possible to negotiate a lower repayment rate.
It is Government policy that individuals granted pre-settled status have the same access to benefits as they did prior to the introduction of the EU Settlement Scheme (EUSS). They will satisfy the right to reside element of the Habitual Residence Test and can access benefits if they are exercising a qualifying right to reside, such as a worker or self-employed person, and are habitually resident in the UK. As the Secretary of State for Work and Pensions is appealing the case mentioned in the report, it would be inappropriate to comment any further
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the level of personal debt of (1) entrepreneurs, and (2) company directors of small businesses, who have not been eligible for assistance through the Coronavirus Job Retention Scheme; and what assessment they have made of the proportion of such debt which has been used to keep businesses afloat.
Answered by Lord Agnew of Oulton
The Coronavirus Job Retention Scheme (CJRS) has helped to pay the wages of people in 11.5 million jobs across the country, and the Self-Employment Income Support Scheme (SEISS) has paid out £24.5 billion in grants to 2.8 million self-employed individuals.
Both of these schemes were designed with two principles in mind. First, the need to target support at those who need it most. Second, the need to protect money against error, fraud and abuse, whilst reaching as many people as possible. The Government recognises that some of the eligibility criteria and conditions needed to ensure that the CJRS or SEISS work for the vast majority of people have meant that some may not qualify for them.
Those ineligible for the SEISS or CJRS may still be eligible for other elements of the unprecedented financial support available, such as tax deferrals and billions in loans and business grants.
The Government loan guarantee schemes (including the Bounce Back Loan Scheme (BBLS)) have provided unprecedented support to businesses, with over 1.5 million loans worth over £75bn. Under BBLS no repayments are due from the borrower for the first 12 months of the loan, giving businesses the breathing space they need during this difficult time. In addition, the Government covers the first 12 months of interest payments charged to the business by the lender.
To give businesses further support and flexibility in making their BBLS repayments, the Government has implemented the “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their BBLS facility over ten years. The Government has also made the full repayment holiday available to borrowers from the first repayment. Together, the 12-month payment holiday and interest-free period for borrowers, along with the PAYG options, provide a generous support package giving businesses the time to get back on their feet. Businesses concerned about repayment should contact their lender to discuss the options available to them.
Asked by: Sarah Olney (Liberal Democrat - Richmond Park)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of limited company directors who have been unable to access the Government's covid-19 financial support schemes; and what plans he has to support those directors.
Answered by Jesse Norman
The roadmap for lifting restrictions set out by the Government is under way, and will allow the economy to reopen, demand to increase and life to slowly return to normal. The Government has confirmed that the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) will be closing at the end of September 2021 and the Government will maintain its focus on helping people back into work.
The Government acknowledges that it has not been possible to support everyone as they might want, and that some of the rules, criteria and conditions needed to ensure that the schemes worked for the vast majority have meant that some people did not qualify. However, the Government has acted in line with its policy principles to target support at those who need it most and to protect public money against fraud, error and abuse, while reaching as many people as possible.
The Government has explored a range of options to support COMs who pay themselves through dividends. However, HMRC do not have the data to identify the population of directors who remunerate themselves through dividends. The 3.3 million population of people who receive income from dividends includes working directors but also inactive directors, such as the spouses or children of working directors who are jointly listed as directors of companies, and general investors. Given that some external estimates suggest an active director population which varies from 710,000 to 1.8 million, providing financial support to the entire 3.3 million population could result in more than three out of four grants going to people to whom support is not intended. This would be neither a fair nor responsible use of taxpayers’ money.
HMRC also do not have data to verify what parts of a director’s remuneration to support and therefore the amount of support to which they might be entitled. Dividend income could be coming from multiple sources including investments, and not just dividends in lieu of salary.
As COMs are not self-employed, they cannot qualify for the SEISS. However, those who pay themselves a salary through PAYE from their own company may be eligible for the CJRS. Those ineligible for the CJRS and SEISS may still be eligible for other financial support, including the Restart Grant of up to £18,000 and the extension of the temporary £20 per week increase to the Universal Credit standard allowance for a further six months. The Government announced a £500 one-off payment to provide support to eligible Working Tax Credit claimants. All this builds on an existing package with spending of over £407 billion.
Asked by: Chris Stephens (Scottish National Party - Glasgow South West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether the new Single Enforcement Body is planned to have powers to (a) identify, (b) investigate, and (c) take legal action over cases of bogus of self-employment.
Answered by Paul Scully
The Government has recently published its consultation response on the single enforcement body for employment rights which sets out the high level remit, powers, and overall approach of the new body. The full government response can be found here:
The body will not specifically cover ‘bogus self-employment’. Employment status is based on the reality of the relationship between an individual and the person for whom services are provided. That might not be the same as what the employment contract states. For disputes around the interpretation of employment law, which are often complex and finely balanced, it is right that Employment Tribunals have the power to determine the result, taking into consideration all of the detail of each individual case to ensure any judgment is the conclusion of a fair and transparent process.
We recognise concerns around employment status and the potential for exploitation and the Government is clear that businesses cannot simply opt out of employment rights. The Government is considering options to bring further clarity around the employment status framework, making it easier for individuals and businesses to understand which rights apply to them.
Asked by: Ed Davey (Liberal Democrat - Kingston and Surbiton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department plans to provide support for self-employed individuals who were not aware that late filing of 2019-20 tax returns would obstruct their access to the Self-Employment Income Support Scheme.
Answered by Jesse Norman
At the Budget on 3 March, the Government announced the details of two further rounds of the Self-Employment Income Support Scheme (SEISS). Alongside this, the Government announced that HMRC will now use 2019-20 tax returns to determine the eligibility and award for the SEISS, provided these returns were submitted by 2 March.
This means that hundreds of thousands of people, many of whom became self-employed in 2019-20, may now be able to claim the fourth and fifth grants.
The Government has already given self-employed people more than a month after the statutory deadline to submit their returns. HMRC waived late filing penalties until 28 February. Self-employed individuals who did not file by 31 January will, where possible, have received a notification from HMRC that their return was late.
Allowing returns submitted after the terms and criteria of the SEISS grants were announced on 3 March would have created a significant incentive for fraud. The Government has a duty to protect the tax system from the small minority who would seek to exploit it. The 2 March cut-off point balances access for the vast majority of eligible self-employed individuals, with the Government’s duty to protect the taxpayer against fraud.
The SEISS continues to be just one element of a substantial package of support to the self-employed. The Government has also provided a wide range of loan schemes, business grants, business rates relief, tax cuts, mortgage holidays, increased welfare support, and the Kickstart and Restart schemes.
Asked by: Anne Marie Morris (Conservative - Newton Abbot)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what guidance his Department published before the Budget on 3 March 2021 on the requirement to have filed a 2019-20 self-assessment tax return by 2 March 2021 in order to be eligible for the fourth Self-Employment Income Support Scheme grant.
Answered by Jesse Norman
The Government announced at Budget on 3 March that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and a final fifth grant. This provides certainty to business as the economy reopens and means the SEISS continues to be one of the most generous schemes for the self-employed in the world.
The Chancellor also announced that the fourth and fifth SEISS grants would be based on 2019-20 Self-Assessment tax returns and individuals must have submitted their 2019-20 tax return by 2 March 2021. This date balances access for the vast majority of eligible self-employed individuals, with the duty to protect the taxpayer against fraud as the details of the SEISS grants became public.
HM Revenue & Customs waived the late filing penalty for Self-Assessment tax returns filed online by 28 February to provide relief to all self-assessment taxpayers and agents at a time of unprecedented pressure. The statutory filing deadline of 31 January did not change.
Further information about the fourth grant is available in recently published guidance: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
Asked by: Sarah Olney (Liberal Democrat - Richmond Park)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of backdating Self-Employment Income Support Scheme grants to people who have experienced a significant decline in profits between 2019-20 and 2020-21.
Answered by Jesse Norman
The Self-Employment Income Support Scheme (SEISS) is designed to provide broadly real-time support to eligible self-employed people who are affected by COVID-19.
Backdating previous grants would not meet the objective of providing real-time income support. It would also mean offering potentially significant sums almost a year on from the beginning of the pandemic. This would expose the Exchequer to a high risk of fraud.
The SEISS is just one part of a very substantial package of financial support the Government has made available to support people with the impact of COVID-19.