The Times - UK (2020-11-14)

64 1GM Saturday November 14 2020 | the times

Money

but who, through technicalities at the

companies they worked for, received

some wages through PAYE. If more

than 50 per cent of their earnings

were paid this way during the set

period they did not qualify for self-

employed support.

Were he to give in to his inner

policy wonk, I imagine that Sunak’s

answer as to why these people did not

qualify would be that those who took

dividends ran limited companies,

which are businesses, and so the

Treasury has treated them as such.

There was no bailout for people who

missed out on dividends with other

companies that cancelled them

because of the crisis.

Directors of limited companies

often pay themselves a small salary

and take the rest in dividends to

reduce their tax liabilities. It is a

legitimate way of running of business,

but not everyone likes it, seeing it as a

tax dodge.

Lots of self-employed people feel

that Sunak has implied that they

don’t pay enough tax and that their

national insurance bills would

thus have to rise in the future

to compensate.

That was a mistake, and now Sunak

can’t talk about the self-employed

without inflaming the situation.

Really what he should say is that

allowing this group of workers to

claim support may also lead to multi-

millionaire company bosses who take

dividends being able to claim support,

or investors in private businesses.

Whether this is enough of a problem

to not pay the excluded is debatable,

but at least the issue would be

clearly stated.

Then there are the “complicated”

incomes — those who are stranded in

a no man’s land. This group includes

those such as the beauty therapist

who is self employed, but received

a payout from her late husband’s

pension so that the majority of her

income last year was not from her

self-employment business. She got

no support and no furlough.

It’s clear that billions of pounds

of taxpayers’ money has gone to the

wrong people in the Treasury’s haste

to set up the schemes, and I assume

that there aren’t enough staff to

assess these cases. Sunak himself is

reportedly working 18 hours a day,

which shows you why he spends so

much money on a smart tea mug —

— he’d keel over without the caffeine.

The chancellor needs to be more

even-handed. The fact is that we have

a creative economy that allows people

to earn money, and pay tax on those

earnings, in all kinds of different

ways. But the government-support

schemes don’t recognise that.

The more Sunak refuses sympathy

the longer the feeling of injustice

lingers. You can have a bean-counter

chancellor like Philip Hammond, but

when there’s a pandemic on you need

to be a human being. The wellbeing of

James and his dad depends on it.

Life’s not fair,

Rishi, but try

telling that to

a 13-year-old

L

ast week a teenager uploaded

a video to the internet asking

Rishi Sunak to help his

father. James, 13, did not

speak, he just held up a series

of cards, parodying Bob Dylan, or, for

people nearer his generation, Love

Actually. The cards explained that

his dad is the director of a limited

company and so was excluded from

most government money while

his work had

dried up.

“What has he

done wrong?” one

card read. “You

say he’s a fraud

risk... we’re using

our savings,

but they have

almost gone.”

I have a mental

image of the

chancellor

watching the video through his hands

and wincing. It is hard to argue with a

13-year-old desperately worried about

his parents. It is harder still to argue

that he is wrong. In posing his killer

question, he gets straight to the

crux of the matter, which is all

about fairness.

At school, my history teacher Ms

Fox (the first Ms I ever knew) often

told us when we complained about

things: “Life’s not fair, child. Get used

to it.” She was right, not that teachers

would get away with sharing such

pragmatic advice today.

It is a truth that I suspect Sunak

reflects on when trying to come up

with the perfect Covid-19 job support

system that can’t be taken advantage

of by fraudsters. But when you’re

talking about protecting people’s

livelihoods, fairness is key, and if your

actions are perceived to be unfair you

need to address that perception.

While millions of self-employed

people have been able to access

thousands of pounds in grants, and

millions more

employed workers

have been

furloughed to

protect their jobs,

an estimated

three million self-

employed people

have received

almost nothing.

They will have

to drain their

savings before

they can claim Universal Credit.

This cuts to the heart of the

question posed by James: what have

these people done wrong? Not

receiving help from the government is

one thing, but when the government

is throwing a lot of money at others,

how is this OK?

Sunak is ducking all questions,

which is noticeable for someone who

is usually a skilled communicator.

When he is forced into it, he gives

brief answers that reveal nothing

except his unwillingness to talk about

it.He comes across as stubborn and

lacking in sympathy for people who,

Home

Economics

Jessie

Hewitson

Deputy Money Editorr

throughhishands

e

h

fu

p a t e h a T t s

theycanclaimUnive

in some cases, have not earned a

penny in six months. My bet is that

he has an eye on the “optics” (how

the situation looks). But because

the only response he can give is a

technical one incomprehensible for

the man and woman on the street, he

has opted to say as little as possible.

The two groups most affected are

those who paid themselves mainly in

dividends rather than a salary from

their self-employed work, and people

who were essentially self-employed

Plenty to complain about

The number of people unhappy with

credit companies rose steeply after the

first lockdown. There were three times

more complaints to the Financial

Ombudsman Service about guarantor

loans over the three months to October

than during April to June. Complaints

about home credit were up 97 per cent

and credit cards 26 per cent. The

service had 69,000 complaints from

July to the end of September, up 19 per

cent on the previous three months,

with mis-sold personal protection

insurance still generating the most.

One in three complaints was upheld.

No guarantee for savers

Plans to guarantee savers a minimum

return on their cash have been

scrapped by Financial Conduct

Authority. It said it would not force

banks to pay a basic savings rate

because interest rates were low across

the board and issues to do with the

pandemic were more pressing. The

high street banks now pay 0.01 per

cent on their easy access accounts,

one-tenth of the Bank of England’s

base rate. The best easy-access rate

is 0.75 per cent from Atom Bank. The

FCA has also decided not to ban exit

fees charged by investment platforms.

Parents foot the bill

More than a third of grown-up children

have returned to the family home

since the start of the year, increasing

their parents’ monthly outgoings by

an average of £425, according to the

insurer Canada Life. New furniture has

been bought by 26 per cent of parents,

and 18 per cent have given up their

bedrooms. The “children” moving

home, however, have reduced their

outgoings by an average of £714 a

month. Overall, the living situations of

7.2 million people have changed since

January, of which 10 per cent can be

attributed directly to the pandemic.

All I want for Christmas...

Boys under 11 want Lego for Christmas

and girls under 11 want dolls — those

were the most popular choices on

wish lists written by 40,000 children

on the pocket money app Rooster.

Mobile phones were high on the list

for children of both genders, followed

by the online video games Fortnite

and Roblox and the games console

PlayStation. Children were given an

average of £4.81 a week pocket money,

but they had to earn it: the top three

chores set for them by parents were

making their bed, cleaning their

bedroom and doing laundry.

did you know?

Counterfeit US $50 and

$100 bills from North

Korea are so impressive

that the Federal Reserve

has to use special

equipment to detect them

and nicknames them

“superdollars”

IN THE

SUNDAY TIMES

TOMORROW

plus

Inside story of the

biggest trading day ever

special report

Why £1m may

not give you a

rich retirement

£473,000 for tax tip-offs

Whistleblowers who reported tax

evasion were paid £473,000 in 2019-20

— a rise of 63 per cent from a year ago.

HMRC, which paid out the money,

offers rewards for information and

then pays out a percentage of the

money retrieved from tax avoiders

and evaders. The UK’s tax gap, the

difference between what is collected

and what should be paid, is 4.7 per

cent. In the last tax year HMRC

retrieved £36.9 billion from its efforts

to tackle tax avoidance, evasion and

non-compliance, compared with

£34.1 billion in 2018-19.

Funeral costs on the rise

People are still not putting money

aside for their funeral despite rising

costs for services. The insurer Sun Life

said that average prices have gone up

£146, to £4,417 in the past year, but that

37 per cent of people had no financial

plan for their funeral. More than a third

of those who had planned for their

funeral did not have enough put by

to cover all the costs. A quarter of the

1,500 families surveyed used a credit

card to pay for a loved one’s funeral,

one in five had to borrow money from

a friend or relative, and 15 per cent

had to sell belongings.