As reported in the media recently (see, for example, this report from today’s Telegraph), the Chancellor is said to be mulling over whether to extend the SEISS (Self-Employed Income Support Scheme) beyond the end of May.
A decision is expected this week and the options for the government range from simply stopping the scheme to extending it for the same length of time as the paid-for furlough scheme (i.e. until August). One other possibility is to extend it but to reduce the level of previous annual profitability, which was £50,000 for the scheme ending in May, possibly to £30,000.
Fairness would suggest that if the furlough scheme is extended then the SEISS should be as well, but fairness would also have suggested that Owner Managed Limited companies would have had some support and, as we have written, seemingly ad nauseam, they have simply been thrown to the wolves.
One suggestion in the press is that the Chancellor does have some leeway for extending SEISS because the take-up from the initial scheme has actually been less than expected. This is no surprise to M&S as we have always believed that government figures of who would qualify were unrealistic. We believe that an extension is necessary, not just on the grounds of fairness, but for the pragmatic reason that thousands of SMEs are in dire straits, losing 50%, 60% or even all of their income over the last few months. Even as the economy slowly opens up, regulations on social distancing will continue to make it very difficult for many firms – especially in retail, tourism and hospitality - to operate.
If SEISS does end in five days' time, throwing thousands of self-employed to the mercy of the universal credit system, it will put many livelihoods at risk. Let’s not kid ourselves: we are heading even deeper into the most almighty depression we have ever experienced. I fully appreciate that those in charge of the country are in an invidious position, but here the correct decision, surely is to support our self-employed entrepreneurs, not leave them to be blown away by the storm-winds racing across the economy.
Stewart McKinnon, Director, M&S Accountancy & Taxation