Michael Izza's message to members on the Chancellor's help for the self-employed
26 March 2020: CEO Michael Izza on Chancellor Rishi Sunak's new scheme to help millions of the self-employed impacted by COVID-19.
|Addendum from Michael on 27 March 2020: "With a number of other business leaders, I had a good meeting yesterday with Alok Sharma MP, Secretary of State. I am impressed with the Government's determination to do what's necessary to protect employment and prosperity, and at the way in which different parts of Whitehall - BEIS, HM Treasury, HMRC, Department of International Trade, DWP and the regulators - are joining up to do that. Both the support for the self-employed announced last night and the Job Retention Scheme, the details of which came out today, are huge interventions which will do much to sustain confidence in business and society. Of course, serious gaps still remain in the coverage, and some of those will be very hard to address, but ICAEW will continue to flag those up to Ministers and work with their departments to find, develop and implement solutions."|
Original message from 26 March 2020:
This evening the Chancellor announced a new scheme to help millions of self-employed individuals affected by the coronavirus outbreak.
Supporting the self-employed through this crisis is an enormous challenge, to which there are simply no easy answers. The commitment to parity with employees on company payrolls at 80% of earnings is fair, and this bold intervention by the Chancellor will do much to protect people in this vital part of the economy. As part of this help, HMRC has also extended the self-assessment tax return filing deadline for another four weeks, which will allow late filers to access the help for the self-employed.
We appreciate the operational difficulties of setting this up from scratch with civil servants working day and night to devise schemes that protect jobs, industries and our economy. However, the prospect of waiting until June for the grants to arrive will be a huge concern for many, even though this scheme will operate alongside other measures, which will allow businesses to retain cash and access finance.
The self-employed will need forbearance and understanding from others to get through the next few months. We will continue to speak to government, banks and other alternative lenders to see whether there is any way through these issues.
We are pleased that the Chancellor recognised the challenges faced by medium-sized companies which may require funding not available through the CBILS or the Corporate Finance Facility. Notwithstanding the difficulties, we would like this looked at with haste.
Right now, the key challenge is to manage cash flow. There are now a number of available reliefs on offer and further details are emerging all the time. Companies should look carefully at the details of the full range of fiscal and monetary interventions aimed at allowing businesses to stand by their employees, rather than laying people off.
We have been hearing the about the difficulties being experienced by SMEs in their supply chain, apparently caused by larger firms not paying their suppliers on time. At this time, more than ever, it is important that suppliers are paid to terms and that we keep liquidity in the system.
Tax & Coronavirus Job Retention Scheme
We expect additional details to emerge from HM Treasury tonight on the Coronavirus Job Retention Scheme. My thanks to our Tax Faculty who have been working tirelessly to influence and shape how this scheme will work in practice. The majority of enquiries from members have been on this topic and traffic to icaew.com on furloughed workers almost caused our website to crash yesterday!
The Chancellor outlined safeguards to ensure these schemes are not open to abuse. We are working with government to try to ensure the schemes are designed so that people accessing them within their rules can do so with certainty that they will not subsequently be penalised.
Finally, I am sure some of you won’t have missed the closing comment in today’s press conference that, given this assistance to the self-employed, the Chancellor wants to start a discussion about levelling the differences between what the employed and the self-employed pay in tax and NIC. That hints at potentially far reaching reforms of the tax system to come. ICAEW will continue to be at the heart of developments in tax and will seek to help government design a system that works better for taxpayers.
We are working to update the information on our website as quickly as possible and help you to navigate the information coming from government. Please do keep checking it regularly.
Please also continue to share with us the issues you are facing via this form on our website, or indeed any success stories in terms of accessing the support now on offer.