"Sustaining a business while having a baby is a huge challenge and mothers are now battling for business survival amid the business disruption caused by Covid-19."
Co-Chair of the WEPG, Professor Julia Rouse
New mothers who had taken maternity leave in the last three years were previously being unfairly disadvantaged under the Self-Employment Income Support Scheme (SEISS), according to campaigners.
Under the Self Employment Income Support Scheme, the government will pay self-employed people grants of 80% of their average profits, up to £2,500, for three months.
These average profits are calculated based on the last three years of tax returns, but these calculations did not previously consider any time taken off for maternity leave in that period, which substantially brought down the average for thousands of self-employed women.
Campaigners estimated that this was set to potentially impact around 80,000 women in the UK who took leave during this time.
The Women’s Enterprise Policy Group (WEPG), which represents leading experts from business support and academia across the UK, launched a lobbying campaign on the issue together with leading social enterprise, The Women’s Organisation, last month.
This came alongside work from the Pregnant Then Screwed campaign group, which is expected to launch a legal case against the Chancellor on the grounds of sex discrimination this week.
Following these lobbying efforts, two groups of parents who were previously excluded from the SEISS are now set to benefit from updated HMRC guidance.
The extension now means that self-employed parents who did not submit a tax return for 2018-2019, or those for whom self-employment was not their main job, will now be able to claim under the scheme, as long as they meet the other required eligibility criteria.
These groups will now be able to submit a claim using either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility and grant calculation.
Those who are now eligible under the amendment will be able to make a claim for both the first and the second SEISS grants, depending on when their businesses may have been adversely affected by Covid-19, when applications for the second grant open in August.
However, the leading women enterprise groups who lead the lobbying campaign say that this support does not go far enough and still fails to properly recognise the value of female entrepreneurs.
Campaigners from the WEPG say that the extended support still fails to help new parents overcome the disadvantage of having a reduced self-employment income due to having a child in 2016-17 or 2017-18.
Likewise, those who took parental leave between 2018-19 and were previously eligible for the SEISS will still not have any reduced self-employment income taken into account.
This means that thousands of self-employed parents still stand to take a substantial financial hit under the scheme.
Professor of Entrepreneurship at Manchester Metropolitan University and Co-Chair of the WEPG, Julia Rouse, says: "We welcome HMRC moves to make new parents eligible for the Self-employment Income Support Scheme. However, we still consider it to be a real injustice that HMRC is not taking periods of low income caused by taking maternity into account across the 3-year period over which payment is assessed.
“Sustaining a business while having a baby is a huge challenge and mothers are now battling for business survival amid the business disruption caused by Covid-19. For instance, we know that women typically find themselves as primary care givers in their households, add to this the disruption of nursery and school closures, alongside reduced access to family help with infant and childcare.
“Why can't the Chancellor do the right thing by women entrepreneurs by properly recognising the value of their businesses and their mothering? We support Pregnant Then Screwed in their legal case to get proper justice for new mothers who are self-employed.”