Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made a recent assessment of the potential merits of bringing forward the application window for the fourth Self-Employment Income Support Scheme grant.
Answered by Jesse Norman
The Government announced at Budget 2021 that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and a final fifth grant.
The Government also announced a significant change in access to the SEISS. Basing the fourth and fifth grants on 2019-20 Self Assessment tax returns means more than 600,000 people are brought into scope who either became self-employed in 2019-20; or were ineligible for previous grants, but now may be eligible for the fourth grant on the basis of submitting their 2019-20 tax return.
Using these returns requires time to deliver, due to the increased population and new data. In order to allow HM Revenue and Customs (HMRC) time to process 2019-20 tax returns it has not been possible to invite applications or open the claims service earlier.
Individuals must have submitted their 2019-20 tax return by 2 March to be considered for the SEISS. 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.
HMRC will open the online claims service for the fourth SEISS grant from late April 2021 and expects to notify potentially eligible people of their personal claim date from mid-April.
The SEISS is just one part of a wider package of support for the self-employed, including Restart Grants, the Recovery Loan scheme, business rates relief, and other business support schemes.
Asked by: Gavin Robinson (Democratic Unionist Party - Belfast East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of inviting applications for the fourth grant of the Self-Employed Income Support Scheme earlier than mid-April 2021.
Answered by Jesse Norman
The Government announced at Budget 2021 that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and a final fifth grant.
The Government also announced a significant change in access to the SEISS. Basing the fourth and fifth grants on 2019-20 Self Assessment tax returns means more than 600,000 people are brought into scope who either became self-employed in 2019-20; or were ineligible for previous grants, but now may be eligible for the fourth grant on the basis of submitting their 2019-20 tax return.
Using these returns requires time to deliver, due to the increased population and new data. In order to allow HM Revenue and Customs (HMRC) time to process 2019-20 tax returns it has not been possible to invite applications or open the claims service earlier.
Individuals must have submitted their 2019-20 tax return by 2 March to be considered for the SEISS. 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.
HMRC will open the online claims service for the fourth SEISS grant from late April 2021 and expects to notify potentially eligible people of their personal claim date from mid-April.
The SEISS is just one part of a wider package of support for the self-employed, including Restart Grants, the Recovery Loan scheme, business rates relief, and other business support schemes.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the number of small business owners who have foregone their personal salaries to provide additional investment for their businesses during the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
The Government recognises the challenges faced by small business owners due to COVID-19. That is why the Government has committed to a very substantial package of support to help businesses, their owners and employees through this difficult time. Small business owners may benefit from extensions to the Coronavirus Job Retention Scheme (CJRS) and to the Self-Employment Income Support Scheme (SEISS) to September 2021 announced at the recent Budget. The CJRS has supported 11.2 million unique jobs (by 15 February 2021) supporting 1.3 million employers with £53.8 billion. The next SEISS grants will potentially support an additional 600,000 claimants, bringing the Government’s support for the self-employed to £33 billion. Alongside this, small businesses have benefited from Small Business Rates Relief and may continue to benefit from the extended business rates relief for the retail, hospitality and leisure sectors. These firms may be eligible for the newly introduced Restart Grants, due to start in April, alongside having the opportunity to apply for a share of an additional £425 million top up to Local Authority Additional Restriction Grants. They may also be eligible to apply for the new Recovery Loan Scheme and may also benefit from the reduction of VAT for eligible businesses, and deferrals to VAT repayments.
Despite this level of support, the Government acknowledges that it has not been possible to support everyone as they might wish, such as company directors. Where groups have not been included it has been because of two guiding principles; to target support to those who need it most, and to protect public money against error, fraud and abuse. Despite extensive analysis and engagement, no practical way has been found to identify and target directors unable to draw on the SEISS or CJRS, and to assess the value of support they should receive.
Asked by: Stewart Malcolm McDonald (Scottish National Party - Glasgow South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to ensure the Self-Employment Income Support Scheme, covering February, March and April, is immediately available for applications.
Answered by Jesse Norman
The Government announced at Budget 2021 that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and a final fifth grant.
The Government also announced a significant change in access to the SEISS. Basing the fourth and fifth grants on 2019-20 Self Assessment tax returns means more than 600,000 people are brought into scope who either became self-employed in 2019-20, or were ineligible for previous grants but now may be eligible for the fourth grant on the basis of submitting their 2019-20 tax return.
Individuals must have submitted their 2019-20 tax return by 2 March to be considered for the SEISS. 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. Using these returns requires time to deliver, due to the increased population and new data.
HM Revenue and Customs (HMRC) will open the online claims service for the fourth SEISS grant from late April 2021.
HMRC expect to notify potentially eligible people of their personal claim date from mid-April.
The SEISS is just one part of a wider package of support for the self-employed, including Restart Grants, the Recovery Loan scheme, business rates relief, and other business support schemes.
Asked by: Andrew Rosindell (Conservative - Romford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of extending the Self-Employment Income Support Scheme to include people who did not return a self-assessment form before 3 March 2021.
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 more than 600,000 people, many of whom became self-employed in 2019-20, may now be able to claim the fourth and fifth grants, bringing the total number of people who could be eligible to 3.7 million.
The Government has already given self-employed people more than a month after the statutory deadline to submit their returns without penalty. 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 on or after the terms and criteria of the SEISS grants were announced on 3 March would create a significant incentive for fraud.
Asked by: Caroline Lucas (Green Party - Brighton, Pavilion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish the criteria used to determine the circumstances in which (a) self-certification and (b) a statement from an accountant are considered a reliable means of certifying a business or an individual’s statement of income.
Answered by Jesse Norman
The context for when and whether to use self-certification in a scheme design is important.
In relation to Self-Assessment HMRC have built up systems and processes over many years that mitigate the risks of fraud and error in Self-Assessment returns. This information has been used to identify those eligible for the SEISS, and thus eligibility for the scheme is not based on self-certification. The same is true for the CJRS.
Through the SEISS the Government has been able to support millions of self-employed people rapidly and effectively. The Government has based the populations eligible for CJRS and SEISS on data that it already holds and that can be quickly and easily verified at large scale.
Without these precautions, the support schemes would be at risk of delay, unmanageable operational overload through the need for manual processing, significant error and fraudulent attacks.
More widely, it is appropriate that the tax system make some qualified use of self-certification. For example, under the SEISS, self-certification helps to target support within the population identified through Self-Assessment returns better; it is not used to determine eligibility in the first place.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will review self-certification tax declaration rules which currently prevent small company directors being able to access covid-19 support packages.
Answered by Jesse Norman
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.
The SEISS relies on the information provided through tax returns to determine eligibility for the scheme and to calculate the grant amount. These returns are also used to protect the scheme from abuse by organised crime groups and fraudulent operators; when an individual applies to the SEISS, HMRC can cross-check the person’s SEISS application against their tax returns.
It is not possible under current reporting mechanisms for HMRC to distinguish between dividends paid in lieu of employment income and those paid as returns on investment in the company. The Government has considered proposals under which company directors would be allowed to self-certify how much of their dividends are in lieu of salary, and then claim SEISS based on that self-certification. However, it is clear that this would open up the scheme to an unacceptable risk of opportunistic fraud and criminal activity.
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.
Asked by: Mark Menzies (Independent - Fylde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he has taken to extend the Self-Employed Income Support Scheme to (a) people who previously did not qualify and (b) people who have become self-employed within the last two years.
Answered by Jesse Norman
Throughout the crisis, the Government’s priority has been to protect lives and livelihoods. The Self-Employment Income Support Scheme (SEISS) was designed to target support at those who most need it, while protecting the Exchequer against error, fraud, and abuse.
The Government has sought to improve and extend the scheme where possible, for example by amending eligibility conditions to enable self-employed parents who did not submit a tax return for 2018-19, or whose trading profits in 2018-19 were less than their other income because they were pregnant or taking time out of their trade to care for their new-born child, to claim for a grant.
The Government does recognise that some of the rules, criteria and conditions that were vital to ensuring that the SEISS worked for the vast majority, meant that some people did not qualify. However, as the National Audit Office report acknowledged, the Government was right to introduce the SEISS, which has been successful in helping to support millions of self-employed individuals and is just one element of a wider £280 billion package of support.
Those ineligible for the SEISS may still be eligible for other elements of the support available, including increased levels of Universal Credit, Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of people classed as newly self employed that do not qualify for support under the Self-Employment Income Support Scheme; and if he will make a statement.
Answered by Jesse Norman
In delivering the SEISS, the Government has had to balance reaching as many people as possible, while protecting the public purse from the substantial risk of fraud by organised criminals and others who would seek to exploit these schemes. This has meant using data that HMRC already hold, in the form of Self-Assessment tax returns for the years up to and including 2018-19.
The SEISS continues to be just one element of a substantial package of support for the self-employed. 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.
The Government publishes statistics on SEISS on a regular basis, including the number and value of claims. The latest round of statistics is available at: https://www.gov.uk/government/collections/hmrc-coronavirus-covid-19-statistics.
Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending the eligibility criteria for the Self-Employment Income Support Scheme to include the financial year 2019-20; and if he will make a statement.
Answered by Jesse Norman
In delivering the SEISS, the Government has had to balance reaching as many people as possible, while protecting the public purse from the substantial risk of fraud by organised criminals and others who would seek to exploit these schemes. This has meant using data that HMRC already hold, in the form of Self-Assessment tax returns for the years up to and including 2018-19.
The SEISS continues to be just one element of a substantial package of support for the self-employed. 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.
The Government publishes statistics on SEISS on a regular basis, including the number and value of claims. The latest round of statistics is available at: https://www.gov.uk/government/collections/hmrc-coronavirus-covid-19-statistics.