Rishi Sunak confirms HMRC is ‘considering’ the Targeted Income Grant Scheme – SEISS update

Rishi Sunak says a ‘targeted income scheme’ is being considered

Rishi Sunak and HMRC have been heavily criticised for SEISS problems in recent months as it emerged that millions of self-employed workers would be ineligible due to stringent rules. According to analysis from the likes of ExcludedUK, around three million self-employed workers are not able to receive any coronavirus-themed support from the Government.

As a result of these difficulties, the “Gaps in Support All Party Parliamentary Group” urged the Chancellor to back a new support scheme designed to help excluded workers.

The official proposal was presented to the Treasury over the last week or so and today, Tracy Brabin, the Labour MP for Batley and Spen, asked Rishi for an official response: “Last week the Chancellor received a detailed and costed policy proposal for a targeted income grant scheme, written by Rebecca Sealy Harris and supported by the gaps in support all party parliamentary group.

“Now this scheme would be a vital first step in giving meaningful financial support to many of the millions who have been locked out of the current schemes, desperate after nearly a year of the COVID pandemic.

“So can the Chancellor tell us today, whether he plans to progress with this proposal, or does he have another scheme in mind for the millions in need of support?”

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The Chancellor was brief in his response but provided an important confirmation: “I’m happy to tell the honourable lady that my honourable friend the financial sector Treasury met with the authors of the report I believe back in December, and is considering it alongside all the other submissions that we received at the Treasury.”

Throughout the questioning, the Treasury team kept on repeating that any official announcements wouldn’t arrive until the official budget was laid out, meaning self-employed workers will have to wait until March for official confirmations.

TIGS support itself will be broken down for four specific sections of the self-employed community should it be introduced, with the following excluded groups potentially receiving support:

  • The newly self-employed
  • PAYE freelancers
  • Ltd Company Directors
  • Those excluded by the 50/50 rule in SEISS

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The “ambitious” plan has the support of 262 MPs spread across various political parties, with the proposals setting out eligible recipients will get a one-off targeted grant worth between £3,500 and £7,500.

The plans creator, Rebecca Sealy Harris, estimated the cost of implementing this scheme to be approximately £10.5billion.

In defending her plans, she argued avoiding a short-term cost now would have dire impacts in the long-run: “The Government’s Covid-19 financial support package has been generous and set up at speed.

“The Coronavirus Jobs Retention Scheme and the Self-Employed Income Support Scheme have provided support for millions of employees and the self-employed.

“However, a number of individuals and businesses have fallen through the cracks of support and faced many months of financial hardship.

“Small businesses, sole traders and entrepreneurs will be the engine of the UK’s economic recovery in the months and years ahead. But, if we do not support them now, many face ruin.

“Without targeted support, jobs will be cut, hard-earned savings will run dry and livelihoods will be lost. It will be much more expensive to rebuild what we had later down the road than to provide the reasonable support needed now.

“Without these individuals and businesses, the UK cannot ‘build back better’. As we look to re-energise our economy, these individuals and businesses will be instrumental. Their hard work and innovation will create jobs, widen opportunities and provide a way out of the Covid-19 crisis.”

It should be noted that the ONS recently revealed that public sector debt has increased to £169.3billion in day-to-day spending, largely as a result of coronavirus support measures.

In their official forecasts, the ONS predict total borrowing could reach £393.5billion by the end of March 2021.

While many will be hoping for furlough and SEISS extensions as the March budget approaches, many others may be hoping for the Chancellor to reign in spending.

It remains to be seen what announcements will be made but many fear steep tax rises could be on the horizon as the Government looks to claw back spending.

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