The Chancellor must fix his unfair rescue plan for the self-employed
sir – The Chancellor’s scheme to help the self-employed omits people who trade through a limited liability company and are remunerated by salary and dividends.
I know the details of one business, which I believe are replicated in many others run by self-employed people. Its income is seasonal and unpredictable. Its owner owns all of its shares, works full-time in the business and has no other employees. He draws a fairly low monthly salary under the PAYE system and, in good years, the majority of his annual income comes from dividends. The business is currently not operating and the owner therefore has no income at all. His salary and dividends did not exceed £50,000 in the last tax year.
The owner pays PAYE on his salary, income tax on his dividends and corporation tax on the company’s taxable profits. If he was paying another employee a salary, that person would be entitled to a grant of up to £2,500 per month. Yet the owner of the business, who started it, finances it and takes all the risk, will only receive a grant based upon his salary and not his dividends too.
Handing out taxpayer funds in these difficult times on an unfair basis is a recipe for long-term resentment. Small businesses will be important in the fightback that will come once the virus has been beaten. I urge the Chancellor to change his scheme.
London SW6
sir – I have owned and run my lighting manufacturing company for more than 40 years.
The lighting industry faces stiff competition from the Far East. Products arrive in Britain that cost the same as our raw materials. This makes life difficult, but it is nothing compared to the problems companies such as mine are facing now.
I am in self-isolation, but production has continued and lighting for use in NHS temporary medical installations has been prioritised. Although my company is complying with all government protection standards, we have received online abuse for not closing down. Yet the economy will need companies like mine to pick up the pieces when this is all over.
Gillingham, Dorset
sir – Banks are refusing to advance government money allocated for business rescue unless customers have tried all other conventional means of borrowing, such as the pledging of property as security (report, April 1). This defeats the entire purpose of the Government’s rescue scheme.
The Bank of England has asked banks to suspend payment of dividends, which they will no doubt be glad to do, and to cease the payment of bonuses, which they will probably not do if past experience is anything to go by. The role of a private banking system that milks society when tasked with helping it must be called into question when this virus crisis is over. Malcolm Parkin
Kinnesswood, Kinross-shire