covid: finance The taxi and private hire sector is missing out on many of the Government’s financial rescue schemes
Falling through the gaps
Mark Bursa
C
HANCELLOR RISHI SUNAK HAS ONCE again ignored the plight of the taxi and private hire sector in the latest round of government incentives designed to help businesses and individuals affected by the Coronavirus pandemic. While the latest package includes an extension of the Job Retention Scheme (Furlough) until next March, a six-month extension of the Self Employment Income Support Scheme (SEISS) grants for self-employed workers and special packages of incentives for the hospitality and sports sectors, there is no specific support for operators and drivers who find themselves inadequately covered by either the Furlough or SEISS schemes. As self-employed workers, many drivers could apply for the SEISS, though as this grant is based on trading profits, many drivers received little or no money. Meanwhile, the second lockdown has removed any upturn in business than some were starting to experience in September. Many cabbies have been unable to access financial support because they do not have rateable premises or operate business bank accounts. And their situation is compounded by the end of six-month “payment holidays” offered on car loans in the early stage of the crisis. These need to resume – but the business has still not returned. The response has been better in Scotland and Northern Ireland, where the devolved parliaments have launched emergency funds that offer grants to drivers. But operators and drivers in England are finding themselves stranded. And with many companies reporting a fall of up to 95% in their operations, many are desperate for help. Terry Hill, managing director of Tonbridge’s Castle Cars, said the new measures were great news for companies that can shut down until the end of March and furlough their staff. “But what about the companies like mine that need to stay open for key staff, elderly and vulnerable people that have no other transport? We will have to operate on around 20% of our ‘normal’ income, but in order to stay open we cannot furlough the office staff that need to be there to take the calls. We have already had to lose two of our five
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Rishi Sunak MP
staff to survive until now. Our rent and operating costs still have to be paid, but with what?” Hill believes the pandemic has cost his company around £135k in turnover, and money he saved over the past years is being swallowed up fast. “When this shitty situation is over the government is going to need companies like mine to be paying taxes through income, VAT, and fuel duty to get the economy going again, but it seems they would rather see us close down completely now. There is no way back for us once that happens, and it would result in numerous people that would also be claiming benefits to live, while not contributing anything to the economy to rebuild it. I know there are people in a worse situation than me, but where is the help for those of us that want and need to keep going?” The lack of support is in stark contrast to other sectors that have been hit by the pandemic, such as hospitality and leisure. The Government Terry Hill
has made available more than £1 billion a month in cash grants for these businesses. Around 90% of shops, gyms, cafés, restaurants and bars in England which have been forced to close will receive up to £3,000 a month, intended to cover rent. Businesses in hospitality, leisure and accommodation which suffered from tighter local restrictions between August and November can claim backdated grants of up to £2,100 a month for that time. English local authorities will also receive a one-off £1.1 billion fund to help sustain their local economies. This is a summary of the latest initiatives, which may apply to many businesses in the sector.
CORONAVIRUS JOB RETENTION SCHEME Employees who cannot work full time, or at all, will continue to be subsidised by the Coronavirus Job Retention Scheme – or furlough– which has now been extended through to the end of March, 2021. Employees are eligible regardless of whether they have previously been furloughed, providing they were on the company payroll at the end of October. This latest scheme eases the burden on employers who previously paid 20% of furloughed workers’ wages. This time, the Government will pay the full 80%, up to £2,500 a month, for hours not worked, with employers liable only for staff National Insurance and pension contributions. Employees who were laid off on or after September 23 may be able to be rehired, and then returned to furlough. Businesses can use this scheme for any amount of time and shift patterns, including zero hours and part-time contracts. Businesses must claim for November before 14 December and the Government will review terms in January.
SELF EMPLOYMENT INCOME SUPPORT SCHEME (SEISS) People who work for themselves will benefit from a further SEISS cash grant of up to 80% of profits. This will cover the, November, December and January months. The grant will be paid in a single, taxable instalment of up to £7,500. Selfemployed people in the UK can put in a claim from November 30, and will receive cash well
NOVEMBER 2020
