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Lots of people asking why ltd co contractors are excluded from the self-employment income support scheme, and why @teamIPSE has broadly welcomed the scheme despite the fact most IPSE members (who are ltd co's) won't benefit - so here's a thread
IPSE lobbied for the introduction of the scheme and we said it should have applied to ltd co's. You can see our submission to the @CommonsTreasury from earlier this week in which we made that clear: https://bit.ly/3bvk5ri So that was our starting position
On Tuesday and Wednesday we had the first of two extensive phonecalls directly with the Chancellor during which he made the following points clear:
1. There was absolutely no way he was going to consider 'replacing' dividend income in the same way as he has 'replaced' earned income. He says dividends are primarily a return on investments. We argued, he firmly rejected the point
2. He insisted on introducing a salary cap - an annual gross profit beyond which no support would be given. That cap ended up, amazingly, at £50k. Initially the Chancellor talked about £30k. The vast majority of IPSE members exceed those limits anyway
3. This is the big one. If Ltd Co contractors had been included in the package we would have lost the IR35 argument FOREVER. If you don't believe me look at what the Chancellor said about sole trader national insurance rates the announcement
I know this is a terrible, terrible time for business. Thousands have seen their income fall of the edge of a cliff. Ltd co contractors are like every other business, some are alright - for now, some are staring into an abyss
We at IPSE are pleased that for a lot of sole traders, help is going to be available. For ltd co contractors, we are pleased that this dreadful crisis has brought about a stay of execution on IR35, but we appreciate that doesn't make up for a complete stop in income.
We fully intend to spend the next year fighting for the IR35 delay to become a permanent abandonment. If ltd co contractors had received a support package like the one announced for sole traders yesterday, that fight would be dead in the water. We couldn't let that happen
For those ltd co contractors that have seen their income cut off completely - and I know there many - there may be some help via the Jobs Protection Scheme, the business loans, even UC. It probably won't be much but its worth looking at. More on info at http://ipse.co.uk
