Thursday 21 January 2021 2:36 pm

Millions of Brits still missing out on self-employment grants

The government has faced mounting calls to increase the number of grants for self-employed workers, after the spending watchdog yesterday warned millions are still missing out on financial support.

A survey of more than 6,000 households released today by the Office for National Statistics’ (ONS) found that only 24 per cent of self-employed people had received support from the Self-Employment Income Support Scheme (SEISS) up to October 2020.

The figure means more than three-quarters of self-employed workers surveyed by the ONS have not yet received government support.

According to the latest official figures, 2.7m out of around 5m self-employed workers in the UK have received SEISS grants. A spokesperson for the Treasury said only 3.4m freelancers were found to be eligible for the grants.

SEISS grants were introduced by chancellor Rishi Sunak in March last year to help self-employed people weather the financial turmoil of the pandemic. 

The programme has seen the Treasury spend more than £18bn on grants of up to 80 per cent of profits, up to £2,500-a-month, to self-employed workers affected by the coronavirus crisis. 

However, Sunak has faced sharp criticism for allowing millions of self-employed workers to fall through the cracks during the coronavirus crisis.

‘Not a penny’

Parliament’s spending watchdog yesterday called on the government to explain why “quirks in the tax system” meant a large portion of the self-employed workforce had “not had a penny” from its various financial support schemes during the pandemic. 

The SEISS grants are based on turnover submitted on tax returns made between 2016 and 2019 as an average. 

That means anyone who became self-employed after 6 April 2019 would not have completed a tax return form for the qualifying years and would therefore not be eligible to claim.

The Treasury has insisted the stringent requirements are to mitigate the risk of fraud.

But the Public Accounts Committee (PAC) yesterday urged the government to “publish an explanation of why it can’t help those freelancers and other groups that have been excluded from receiving any support”.

“As public spending balloons to unprecedented levels in response to the pandemic, out-of-date tax systems are one of the barriers to getting help to a significant number of struggling taxpayers who should be entitled to support,” said PAC chair Meg Hillier.

The SEISS grant has been extended three times since it was first introduced last year, with the fourth grant expected to open for applicants in the coming weeks.

Campaign group ExcludedUK has called for the government to urgently roll out financial support for “Britain’s forgotten 3m” freelancers, as England wades through its third national lockdown.

Co-founder Sonali Joshi told City A.M. “Government has repeatedly used the rather disingenuous excuse of fraud as to why 3m taxpayers have been excluded from the schemes. 

“ExcludedUK has repeatedly called for the 3m taxpayers excluded from support through no fault of their own to be given urgent support to achieve parity with those taxpayers who have been supported, and now 10 months on this is more crucial than ever.”

Correction: This article initially stated that three-quarters of self-employed workers have not received SEISS grants. The article has been updated to reflect that this figure was based on a sample population surveyed, rather than the total UK population