SEISS, LOANS AND DEFERMENTS: What the new support package provides taxi drivers

Image credit: HM Treasury

The Chancellor Rishi Sunak today outlined additional government support to businesses and workers impacted by the coronavirus across the UK.

For self-employed taxi drivers, who have been heavily hit financially due to COVID-19 restrictions, there were changes to both the Self Employment Income Support Scheme (SEISS) and Bounce Bank loans.

The Chancellor announced the continued support for millions of self-employed individuals by extending the SEISS. An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.

The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.

Cabbies who are part of the 11 million self-assessment taxpayers, will also be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

There were also changes to the Bounce Back Loan offering through a new ‘Pay as You Grow‘ flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.

Whilst delivering the eagerly anticipated speech in Parliament, the Chancellor announced further measures to protect jobs and help businesses through the uncertain months ahead. The package included a new Jobs Support Scheme aimed at protecting millions of returning workers and a 15% VAT cut for the hospitality and tourism sectors.

The Chancellor of the Exchequer Rishi Sunak said: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery…

“Our approach to the next phase of support must be different to that which came before.

“The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve.”

Dame Carolyn Fairbairn, CBI Director-General, said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. It is right to target help on jobs with a future, but can only be part-time while demand remains flat. This is how skills and jobs can be preserved to enable a fast recovery.

“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.

“The Chancellor has listened to evidence from business and acted decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”

Mike Cherry OBE, Federation of Small Businesses National Chair, said: “The UK’s small businesses are facing an incredibly difficult winter. Today’s support package is the flipside of the coin to Tuesday’s COVID-19 business restrictions.

“It is a swift and significant intervention, extending emergency SME loans, creating new wage support for small employers and the self-employed, and providing cashflow help on VAT deferrals and new Time To Pay for any tax bills to HMRC.

“We welcome that the Chancellor is ensuring that decisions to protect public health are informed by the need to protect the economy, people’s jobs and prospects for young people in our schools and workplaces.”