Dear Anneliese (Dodds),
Thank you for your email and we are delighted to be able to provide input regarding the current plight of the self employed and small business community. While it is encouraging to hear that the government is engaging with you in this crisis it is imperative that the issues this sector is facing be taken into urgent consideration.
We are called Your Business Community (YBC) and are a representative voice for said sector. Governments simply don’t understand what it is like to run your own business and we’ve often said that we represent an invisible community of over 5 million people! We’ve been polling our members and will highlight their collective responses below.
The health of the population is of paramount importance but the government response to business has left many of our members bewildered. From the outset we at YBC acknowledged that we are facing an unprecedented economic crisis but not enough thought has been given to the humanitarian crisis that is happening as a consequence. We called for a Universal Living Wage payment to be made to every adult as, at a time like this, we should not be compensating what people earn but, instead, looking at what they need.
Self Employment Grant
Many many people will fall through the gaps in this scheme. No consideration has been given to the fact that business owners have to invest significantly in their businesses before they show a profit and that there are ongoing costs even if they choose to stop trading temporarily. Newer businesses are not covered either which is outrageous when employees starting jobs in February are eligible. Payments not being issued until June is also unacceptable when furloughed employees carry on getting paid.
Directors of Limited Companies
The tax system encourages directors to pay themselves a salary of £700-£750 per month and to then declare dividend payments to themselves. To not include dividends in this scheme is grossly unfair as this is purely legitimate tax planning. To make matters worse if those companies are employers these directors are expected to pay their furloughed staff while only receiving around £575 per month themselves.
The reality though is that most directors cannot furlough themselves if they want their business to survive.
Many small employers that choose to furlough staff but continue to work themselves simply cannot afford to pay their staff and wait to be reimbursed.
As above investment and ongoing costs have been ignored.
Business Rate Grant
Some councils seem to be acting quicker than others and there needs to be urgent government intervention. We are aware of members in some parts of the country receiving payments whilst other areas remain in the dark. We understand that councils are already in receipt of payments from central government and need to forward this ASAP.
Many members of ours who are working from serviced offices are aggrieved that they aren’t eligible for the Business Rate grant even though, in many instances, their contract states that their rent includes this.
There is also an outcry from the self employed regarding why they have to wait until June when business rate grants are happening now.
Business Interruption Loan Scheme
Despite government guidance banks are still asking for personal guarantees and we’ve heard of loans being offered at up to 28 percent interest. Most respondents though have said that they have had no reply from their bank since applying online.
Many of our members feel terribly let down by the current measures put in place and it is evident that the Chancellor’s claim that 95 percent of people are covered is ridiculous.
I look forward to working with you going forwards and should you or any of your team need to speak with me I can be contacted on 07801 924208.