Business

Covid-19: £10m grant scheme for newly self-employed criticised for 'inflexibility'

Economy Minister Diane Dodds.
Economy Minister Diane Dodds.

A £10 million grant scheme for newly self-employed people has opened for applications, but it has already drawn criticism for being too narrow.

The Newly Self-Employed Support Scheme (NSESS) offers a one-off taxable payment of £3,500.

The Department for the Economy said it will provide support to around 2,900 people who recently became self-employed and have been unable to claim financial assistance under other government schemes.

Around 135,000 people were self-employed in the north last year. The Northern Ireland Research and Statistics Agency (NISRA) estimated that number fell to 120,000 over the summer.

The latest tranche of the UK Treasury’s support scheme for the self-employed attracted 70,000 applications from Northern Ireland at the end of October, with average payments of £2,500.

Economy Minister Diane Dodds said the NSESS “will help thousands more businesses in need”.

“It will provide financial support to newly self-employed individuals (sole traders and those in partnerships) whose business is adversely impacted by covid and who have not been able to access support from the UK government’s Self-Employed Income Support Scheme," she said.

But the initial celebration among campaigners on Wednesday night turned into frustration on Thursday morning when the criteria was published.

It states that to be eligible, self-employed individuals, including sole traders and those in partnerships, must have commenced trading between April 6 2019 and April 5 2020. They must also be able to show that their business has been adversely impacted by Covid-19.

More controversially, the criteria states that trading profits for 2019/20 financial year must be below £50,000, with over 50 per cent of income derived from self-employment.

It means that if someone was registered as a PAYE (pay as your earn) employee and left their job to set up their business during that time, they must have earned more from the new enterprise.

Brian Donaldson, who has been campaigning for individuals excluded from support in the north said: “The problem with the 50 per cent self-employed income for the year is many people who were PAYE employees will struggle to beat that income. Especially for example, if they went self-employed from September 2019 onwards.

“It’s an oversight that the department should be flexible on.”

Invest NI is delivering the new grant scheme for the Department for the Economy (DfE). It will close for applications on January 7 2021.

DfE said if the full £10m is not allocated at that point, it will consider topping up payments for eligible applicants.

Economy Minister Diane Dodds also confirmed on Thursday that she is preparing to present a scheme for limited company directors to the Executive.