Slipping through the cracks


Are you one of the businesses who feel you have been ignored and “slipped through the cracks”?

Many will agree that the government are doing a fantastic job in times that are completely unknown to all of us. Offering as much support as they possibly can to ensure that once this is all over UK businesses can get back on their feet, and continue to trade as they were.

There is no doubting that the package that Rishi Sunak has put together is one of the largest support packages the UK has ever seen, (if you aren’t sure of what is on offer – please visit our COVID-19 support page).

BUT will it be enough, or have some groups slipped through the cracks?

The self employed were seemingly the main category to be missed in the Chancellor’s initial announcement.

If you were an employee and your employer didn’t have enough work for you, furloughing was an option where the government would then make a contribution of up to 80% of your salary (capped at £2500) through the Coronavirus Job Retention Scheme.

Slipping through the cracks 1

Being self-employed, if you didn’t have enough work, then you would have no income, simple as that.

However, about a week after the initial announcement of support packages, the Self-Employment Income Support Scheme was announced, whereby the government would provide grants of 80% of the trading profits of the company. This all sounded great, but there were a few caveats:

  • Trading profits less that £50 000
  • You have filed at least one tax return

HOWEVER, if you were been trading successfully and returning a trading profit of just a penny over £50,000, you will receive no support from this scheme – it seems to be a very all or nothing approach.

Highly paid furloughed employees would still receive £2500 whilst a successful sole trader would receive nothing.

In my opinion it would make far more sense for the government to tier the amount they are able to advance in a grant. For example 80% available up to £50 000, and anything over and above this to be granted at a far lower percentage. The more successful businesses have paid more tax so why not receive more support?

Alternatively a “fairer” option would be to take into account all profits but to set a cap as with furloughed employees. This to me would seem a far more equitable way of looking to support all self employed, rather than just those with a lower trading profit – as they all contribute to the economy.

The condition that to be eligible you must have filed at least one tax return makes sense, as otherwise it would be difficult to determine how much profit will be made. However this means that newer businesses will be getting no support either, at a time where arguably they are most vulnerable.

Could there not be another way to assess profits, such as draft information? That way a grant could still be given, but perhaps at a lower percentage as the information the grant is based on is a little more tenuous?

Many of our clients are limited companies, so whilst they have access to the Job Retention Scheme to help them retain their employees, as business owners they too “fall through the cracks”.


A sole director can furlough themselves but they can then only undertake statutory duties. Even if they are making no money they will still want to be available to their customers to ensure they are in mind when this is over. This is hugely unfair, as self employed will obtain a grant and can still continue to work in their business.

Limited company sole directors with have no salary paid from being furloughed and no self employed income support scheme. They have paid taxes, submitted returns on time, employed people and worked really hard, but get no support in return. Surely this needs to be re-looked at, to keep any ounce of morale amongst this group going?

I can already hear the typing of the keyboard warriors saying that they have access to the Coronavirus Business Interruption Loan Scheme – which in theory is true. However, this would still be debt rather than a grant. Also, statistics are already starting to show that maybe this scheme isn’t delivery as successfully as it should be, in order to be a lifeline for these SMEs.

The treasury advised that out of 130,000 loan enquiries received, so far (as at 3 April 2020) yet only 1,000 had been successful in obtaining an approval. Otherwise companies are seeing a complex underwriting process involving guarantees and inside leg measurements, in order to obtain these loans, often finding that the interest rate after the first year is rather high!

So please don’t think that I am in any way knocking what the government has provided so far, in fact I think they are surpassing everyone’s expectations in their actions to this crisis. However I do feel that there are a large number of businesses falling through the cracks, and are feeling the strain of this pandemic more than others.

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