One in five small businesses not entitled to financial support, FSB reveals

As many as one in five small businesses and sole traders are not entitled to financial support under the Government’s coronavirus support package, it has been revealed.

The Federation for Small Businesses (FSB), who published the report, said up to three million people “have been left out in the cold” because they do not meet the criteria of the schemes.

The latest statistics suggest that the Coronavirus Job Retention Scheme (CJRS) has topped up the wages of some 10 million workers since launching in March last year. The Self Employment Income Support Scheme (SEISS), meanwhile, has supported 2.7 million self-employed people who have lost income as a result of the pandemic.

But the FSB suggests that as many as one in five workers – around three million people – do not meet the strict criteria of either initiative, leaving them at risk of insolvency. These figures include 700,000 limited company directors and 200,000 newly self-employed workers who did not complete a Self-Assessment for the 2018/19 tax year.

And for some, the lack of support may have already proven too big a burden. Recent figures show that self-employment in the UK has dropped from 5.1 million to below 4.6 million, while the number of self-employed workers on Universal Credit has risen by 300 per cent since March 2020.

The FSB is now calling on the Government to extend the SEISS to people who can prove their income using 2019/20 tax returns and those earning over the £50,000 threshold.

Commenting on the report, FSB chairman Mike Cherry said: “There are some extremely concerning gaps and misguided criteria. We need action to address these glaring omissions now. Budget announcements in March, with actual changes taking effect after that, will prove too late.”

A spokesperson for HM Treasury said: “For those who are not eligible for our support schemes, they can still benefit from help like our strengthened welfare safety net, and our plan for jobs provides programmes like Kickstart alongside record investment in skills so that people can find their first job, their next job or a new job if needed.”

For help and advice with related matters, please get in touch with our expert team today.