Asked by: Caroline Lucas (Green Party - Brighton, Pavilion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the reasons for the differences in self-certification requirements for limited company directors for accessing (a) income support, (b) the self employed income support scheme, (c) submitting a tax return and (d) other aspects of the tax system.
Answered by Jesse Norman
The tax system relies in part on self-certification through Self-Assessment as it is not possible to corroborate all information received from taxpayers. HMRC have various controls in place to mitigate the fraud risks associated with Self-Assessment. The risks associated with this depend on the type of scheme. For example, the risk is higher when HMRC are paying money out than when they are taking money in. Controls in place in the Self-Assessment system to mitigate fraud risk associated with self-certification have been built up and tested over many years and have proven to be very effective at preventing fraud.
In relation to wider income support, self-employed Universal Credit (UC) claimants must report their earnings each month in order for their payment to be calculated and released to them. If a Work Coach suspects that a claimant is misreporting their earnings to inflate their award, they can refer the claim to be investigated for fraud.
UC presents a different type of risk compared to COVID-19 support schemes. The Government has been clear that due to the generosity and speed of delivering the COVID-19 support schemes, they could be subject to opportunistic fraud and perhaps even criminal activity. On the Self-Employment Income Support Scheme, its purpose is to support the incomes of people who have lost earnings due to the pandemic. The scheme relies on verified HMRC data to identify and target support to those in need. Unlike the SEISS grants that use information HMRC already hold, targeting additional support at limited company directors would require them to make a claim and submit information that HMRC could not manageably or consistently verify in order to ensure that payments were made to eligible companies and for eligible activity. Relying on self-certification to identify directors or determine income sources could open the scheme up to unacceptable levels of fraud and error.
Asked by: Lord Stevenson of Balmacara (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the report by the Institute for Fiscal Studies Who is excluded from the government's Self Employment Income Support Scheme and what could the government do about it?, published on 27 January; and what plans they have to introduce targeted support to freelance workers in the creative industries who do not qualify for the Self Employment Income Support Scheme (1) who became self-employed after 2019, and (2) who are on zero-hour contracts.
Answered by Lord Agnew of Oulton
The Self-Employment Income Support Scheme (SEISS) has provided and will continue to provide generous support to self-employed people who meet the eligibility criteria.
The Government has recognised taxpayers have faced immense challenges during the COVID-19 pandemic. It has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
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 SEISS is among the most generous schemes for the self-employed in the world. The claims window for the third grant closed on 29 January 2021. As of 31 December, it received claims from 1.9 million individuals so far, amounting to £5.4bn.
The fourth grant will cover February to April 2021. The Government will set out further details at the Budget in March.
The SEISS continues to be just one element of a substantial package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
The Government recognises the value of the cultural sector and creative professionals and has announced a £1.57 billion Culture Recovery Fund to protect the cultural sectors through the COVID-19 pandemic. To date, more than £790m of grants and loans have been allocated to over 3,000 cultural organisations in England. Organisations supported include galleries, theatres, museums, orchestras, music venues, comedy clubs and festivals. This funding will help to support jobs and organisations across the country.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what estimate they have made of the total cost to HM Treasury of providing COVID-19 financial support to those who are ineligible for such support.
Answered by Lord Agnew of Oulton
Throughout this crisis, the government has sought to protect people’s jobs and livelihoods while also supporting businesses and public services across the UK. To do this, the government has put in place an economic package of support worth over £280 billion this year. These support measures are carefully designed to complement each other to ensure we protect jobs and livelihoods. All our support is targeted to make sure public funds are used responsibly, helping those who need it most as quickly as possible, while minimising fraud risk.
Individuals have benefited from the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme (SEISS) and the temporarily increased generosity of the welfare system. On the SEISS eligibility, the scheme is designed to target those who need it most, and who are most reliant on their self-employment income. Around 95 per cent of self-employed people who receive more than half of their income from their self-employment are eligible.
Businesses have benefited from a range of grants, loans and tax reliefs. In January, the Chancellor announced £4.6 billion of further support for the most affected businesses. This includes an additional £500 million, to a total of £1.6 billion, of discretionary funding for local authorities to support their local businesses, known as the Additional Restrictions Grant. As part of the new support package, the Chancellor also confirmed that a further £734 million of additional funding will be provided to devolved administrations to reflect the further increases in support in England.
We must recognise that it will not be possible to preserve every job or business indefinitely or stand in the way of the economy adapting and people finding new jobs or starting new businesses.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to provide support for newly self-employed people who are ineligible for support from the Self-Employment Income Support Scheme.
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.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answers of 25 January to Questions 137329 and 140287, what steps his Department is taking to overcome the practical issues that have prevented the Government from being able to include the newly self-employed in 2019-20 in the Self-Employment Income Support Scheme (SEISS).
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.
Asked by: Andrew Murrison (Conservative - South West Wiltshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to use 2019-20 tax returns to determine eligibility for the Self-Employment Income Support Scheme.
Answered by Jesse Norman
The Government recognises that taxpayers have faced immense challenges during the COVID-19 pandemic and it has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
The Self-Employment Income Support Scheme (SEISS) is one of the most generous in the world and has received claims from almost 2.7 million people so far, totalling over £18.5 billion.
The practical issues that prevented the Government from being able to include the newly self-employed in 2019-20 in the SEISS, namely that HM Revenue and Customs (HMRC) do not have access to the full set of 2019-20 self-assessment returns needed to verify their eligibility, still remain. The latest year for which HMRC have tax returns for all self-employed individuals is 2018-19.
The SEISS continues to be just one element of a substantial package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 18 January 2021 to Question 137329 on Self-employed: Coronavirus, what steps he is taking to include the newly self-employed in 2019-20 in the Self-Employment Income Support Scheme.
Answered by Jesse Norman
The Government recognises that taxpayers have faced immense challenges during the COVID-19 pandemic and it has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
The Self-Employment Income Support Scheme (SEISS) is one of the most generous in the world and has received claims from almost 2.7 million people so far, totalling over £18.5 billion.
The practical issues that prevented the Government from being able to include the newly self-employed in 2019-20 in the SEISS, namely that HM Revenue and Customs (HMRC) do not have access to the full set of 2019-20 self-assessment returns in order to verify their eligibility, still remain. The latest year for which HMRC have tax returns for all self-employed individuals is 2018-19.
The SEISS continues to be just one element of a substantial package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
Asked by: Peter Kyle (Labour - Hove)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer on 11 January 2021 to Question 133991 on the Self-employment Income Support Scheme, what plans he has to include newly self-employed people who file a tax return for the 2019-20 financial year in the fourth grant of that scheme.
Answered by Jesse Norman
The Government recognises that taxpayers have faced immense challenges during the COVID-19 pandemic and it has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
The first Self-Employment Income Support Scheme (SEISS) grant supported 2.7 million individuals with claims totalling £7.8 billion. A further £5.9 billion has been claimed through the second and, as of 13 December, £4.8 billion through the third SEISS grant.
The fourth grant will cover February to April 2021. The Government will set out further details in due course. The Government has taken a flexible and responsive approach and it will continue to look for ways to improve the SEISS grant and existing support.
The SEISS continues to be just one element of a substantial package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
Asked by: Catherine West (Labour - Hornsey and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to (a) close the gaps in the Self-Employment Income Support Scheme identified by the Institute for Fiscal Studies in the fourth round of the scheme for February-April 2021 and (b) pay arrears in respect of rounds one to three inclusive for creative (i) professionals and (ii) other self-employed people who have been ineligible from support under the scheme since March 2020.
Answered by Jesse Norman
The Self-Employment Income Support Scheme (SEISS) has provided and will continue to provide generous support to self-employed people who meet the eligibility criteria.
The Government recognises that taxpayers have faced immense challenges during the COVID-19 pandemic. The Government has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
The design of the SEISS, including the eligibility requirements 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 first SEISS grant supported 2.7 million individuals with claims totalling £7.8 billion. A further £5.9 billion has been claimed through the second grant and, as of 13 December, £4.8 billion through the third SEISS grant.
The fourth grant will cover February to April 2021. The Government will set out further details in due course
The SEISS continues to be just one element of a comprehensive package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
The Government recognises the value of the cultural sector and creative professionals and has announced a £1.57 billion Culture Recovery Fund to protect the cultural sectors through the COVID-19 pandemic. To date, more than £790m of grants and loans have been allocated to over 3,000 cultural organisations in England. Organisations supported include galleries, theatres, museums, orchestras, music venues, comedy clubs and festivals. This funding will help to support jobs and organisations across the country.
Asked by: Kim Johnson (Labour - Liverpool, Riverside)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he will implement the Directors Income Support Scheme proposal from FSB, Forgotten Ltd and ACCA UK, which would provide a taxable grant calculated at 80 per cent of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total, to be paid into the company and form part of its taxable profits and mirror the existing framework offered by the Self-Employed Income Support Scheme.
Answered by Jesse Norman
The Government has recognised that taxpayers have faced immense challenges during the COVID-19 pandemic. It has prioritised delivering support to as many people as possible as quickly as possible, while guarding against the risk of fraud or abuse.
The Government always welcomes constructive proposals from stakeholders to improve the design of its COVID-19 business support schemes, including the suggestion for a Directors Income Support Scheme (DISS). This proposal aims to provide a new system to provide support for company directors, based on reported profits. The Government is currently scrutinising the proposal.
In addition, company owner managers could be eligible for existing support schemes including the Coronavirus Job Retention Scheme for the income taken by company owner managers via PAYE, 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.businesssupport.gov.uk/coronavirus-business-support