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Martin Lewis tells Rishi Sunak people ‘facing homelessness’ over Covid support gaps

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Martin Lewis put the nation’s questions to Rishi Sunak (Picture: ITV)

Rishi Sunak confirmed thousands of business owners will be left without support during the pandemic after being confronted by money saving expert Martin Lewis.

The chancellor was grilled over gaps in his Covid support packages during a 30-minute appearance on the consumer champion’s show.

Mr Lewis took the finance minster to task on his Budget announcement and why there is still no specific scheme to help the estimated 600,000 limited company directors.

He also challenged the Chancellor on the start date for the fourth self-employed income support scheme (SEISS), which will not launch until April.

Although this will finally be applicable to people who became self-employed during 2019/20, Mr Lewis said many face homelessness if they have to wait another month for the scheme to open.

‘Why isn’t the fourth grant available yet?’ he asked the Chancellor.

‘By April, some people will have no money, people have told me they will be homeless by then.’

The Chancellor blamed the delays on bureaucracy.

Martin Lewis grilled Rishi Sunak on gaps in his Covid support schemes (Picture: ITV)

‘There’s a simple reason. If the grant covers the February to April period, we will need to see their full incomes up to that period.

‘This time we are also making an improvement in access to the grant so we need tax figures for the 2019-2020 years. As a result, we need a bit of extra time to process that.’

The money saving expert pressed the Chancellor on whether the date could be brought forward, but the suggestion was slapped down.

Mr Sunak said HMRC is currently processing millions of claims – suggesting a sooner date is highly unlikely.

‘The important thing is in order for us to process the millions of claims and returns we get in and to get the grants out, we need that time,’ he said.

Self Employed grants won’t be available until April (Picture: ITV)
Rishi Sunak confirmed there would be no scheme for limited company directors (Picture: ITV)

Asked whether he would backdate support for people previously locked out of the scheme, the Chancellor said no.

‘We’d have to back-date everyone and that’s simply not possible.’

When the SEISS scheme first launched last year, the HMRC only accepted tax returns from 2018/2019, meaning those who had become self-employed in late 2019 or 2020 could not apply.

Mr Sunak said the extension would make more than 600,000 more people eligble for the future grants.

But other self-employed workers say they are still falling through the cracks almost a year on.

Many solo workers such as plumbers, engineers, freelance musicians, and people working in wedding and events sectors have been shut out of grants because they pay themselves in dividends. 

This is a legitimate and widely used accounting method to manage fluctuating income, but there is no scheme to cover it.

‘Why on earth have you excluded limited company directors yet again? We were teetering on the edge and you just threw us overboard,’ Lewis said, reading out one viewer’s question.

The Chancellor disputed the suggestion they are ‘completely without support’, telling Mr Lewis: ‘ There’s so many different things we’ve done…they could be furloughed for their PAYE income. Their business may be able to benefit from a bounceback loan and in their personal situation they may have been able to benefit from a six-month mortgage holiday and also there’s all the other welfare changes we’ve made.’

The Government has previously said it is too hard to distinguish between rich people who invest in dividends and small business owners who pay themselves this way.

Mr Sunak repeated that argument when pressed by Mr Lewis, suggesting there would be no u-turn on the matter.

‘The simple thing with directors, it’s been a real challenge and I, my team, my ministerial colleague have met with groups and looked at options and there just isn’t a workable option,’ he said.

‘We get 3.3 million dividend tax returns and we have no way of differentiating between the 3.3 million and the 600,000 [limited company directors].

‘So if we did provide support it would mean that three out of every four pounds of the taxpayer going out would not be going to the right people.

‘And that is the challenge that we’ve been grappling with and we just haven’t, there is no way to square those two things.’



Budget 2021: All the key points from Rishi Sunak’s plan

Chancellor Rishi Sunak has set out a bold three-point plan in his Budget which he hopes will help the UK recover from the devastating effects of the pandemic.

Key points from his speech have included an increase of the furlough scheme to the end of September, top-ups to Universal Credit and the increase to the contactless payment limit.

Mr Sunak told MPs that the damage to the economy done by Covid-19 had been ‘acute’ as he began his statement.

Get in touch with our news team by emailing us at [email protected].

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