More than three million people in the UK have not qualified for any of the business support offered by Chancellor Rishi Sunak during the pandemic.

There are three main groups of people who have been excluded. Firstly, of the 1.6 million self-employed people missing out on the Self Employment Income Support Scheme, roughly two thirds earn less than half their income from self-employment in the tax years before the pandemic. As a result, they do not qualify for help. Those who became self-employed in the 2019-20 tax year also miss out.

The second group are those who are not supported by the Coronavirus Job Retention Scheme, which means employers can furlough staff, paying them 80 per cent of their wages and claiming this back from the government. Included in this group are many freelancers, employers who refused to take part, and new job starters.

The third group are company directors. There are 700,000 people who previously earned an income through directors dividends instead of the PAYE system; a totally legal way to organise taxes, yet Sunak has decided directors cannot claim any financial support.

Many of those forgotten are businesses in the Eastlondonlines area. We spoke to three local traders about the impact that being excluded from Covid grants has had on their businesses.

“I feel like forgotten chopped liver.” : Delia Elliott, owner of Splendid Trading

One such company director is Delia Elliott, who runs Splendid Trading in Hackney, a wholesaler to the licensed trade supplying nightclubs, bars and restaurants with cleaning items and kitchenware. The company has been trading for around 25 years, with customers including Ronnie Scott’s Jazz Club and Aqua Shard.

Delia said: “We’ve got a group of bars in the City which haven’t traded since last March. Nobody can get hold of them, and we don’t even know whether we’re going to get a penny off them. We’ve got stock on the floor which has been printed with people’s names.”

The hospitality industry which they supply was closed by law in March. After that, they had one customer, who owns 10 pizza shops and was doing takeaways. They only supplied them with low value items such as toilet rolls and cleaning chemicals.

“I had to put my three full-time drivers on furlough because they had no work whatsoever. Now, only one is on furlough and I had to make the other two redundant. We’ve gone from having 15 people on the payroll to now having four. I’ve had one member of staff work for 14 years, and another for 9 years. One of my employees has special needs and I had to make him redundant too,” she said.

“We knew some of the little bars we used to supply were getting up to £25,000 in grants. I also know bars which only have one full-time member of staff and so far, they have had nearly £40,000 since March. We applied and Hackney Council said, ‘Don’t chase this’, so you don’t know if you’re going to get it. We got an acknowledgment saying thanks for sending it in, but that was it. Since March 2020, we’ve had £10,000, and with 15 full-time staff it’s not very much. We have applied again, but it says don’t apply more than once. Hackney Council’s website has also been absolutely outrageously compromised [the website was hacked in October 2020]. I had to send my company’s excruciatingly private information and confidential bank statements to that website.”

The company is not eligible for grants because technically it is still trading, even though Delia is only supplying one pizza company. The company’s rent is £150,000 a year but they have stopped paying it because they have no money. They are now in breach of the lease.

“One of the reasons we’ve ended up in so much financial trouble is because we’ve had to continue to pay the rent. I find it very upsetting and disappointing that commercial landlords have ultimately had their investment go up a million-fold. They also benefit greatly from tax avoidance. They’ve not been put under any pressure to take a hit on this. They still expect their full rent. That’s not fair. Why has pretty much the whole of the rest of the country had to suffer and not landlords?

They approached their landlord five weeks ago to say they are in £100,000 worth of debt since last March, largely due to having to pay rent throughout the pandemic. They say that their landlord has not responded.

“We’ve not heard a word. Since lockdown we’ve paid him nearly £150,000, most of it was borrowed and we used all of our liquid capital up. We’ve hit the end of the road, and I can’t put any more of my money in. I’m now looking at losing everything. I haven’t had a wage and I’ve got a mortgage.

If there is another lockdown, Delia is certain the business will go under. She is coming up for retirement age and has had to put her own pension money into the business. She is not eligible for furlough and neither is the other director because they get directors dividends.

“It’s frustrating, it’s confusing, it’s complex, it’s badly run. You can’t appeal it and you can’t talk to a human about it. Our turnover used to be £3m. Last month, I think we turned over £30,000. The government grants are one size fits all. When you ask for a handout, there’s no one to help you. You’re not even allowed to ring the council to get help. It actually says don’t contact us. Don’t try chasing.

“It’s a lot more than three million forgotten. I’ve employed hundreds of people over 25 years and always paid my PAYE, NI and VAT. Yet I’ve ended up with no money whatsoever, just because I paid myself a director’s dividend. It’s a thankless task being a director of a company. You have all the responsibility. My friend is a hairdresser, he got £9,000. I got nothing. He works for himself and doesn’t employ anybody. I’ve brought millions into the public coffers over the last 25 years.

The company is due to receive £6,000 in furlough but is yet to get the money. When they do get the money, £2,500 of it will go back to the government in PAYE and National Insurance.

“If I could afford to make all my staff redundant, I would. It would be so much better for me. The only reason they’re still on my books is because I can’t afford to make them redundant without actually liquidating the company.

“Small businesses are the backbone of this country. I would say to anyone younger than me, never employ anyone or run a small business. Rely on yourself, do it for yourself and never be in the position I’m in. After working full-time for 45 years and running a business for 25 of them, I have ended up completely and utterly abandoned. There is no benefit in having staff. You think by paying corporation tax you’re doing the right thing but you end up being a forgotten chopped liver. That’s what I am. If the restrictions don’t end in June, it’s going to be incredibly bad for our trade. The industry is destitute.”

“What needs to be offered now is psychological support for company directors.” : Matthew*, owner of a music production business

Matthew’s* company in Tower Hamlets specialises in bespoke music production and sound design for special events such as fashion shows, product launches and exhibitions. Over 85 per cent of his clients are event production companies.

“I started this business with £1 and got it to generate almost £180k of turnover the year before Covid. My projections for this year at the actual growth rate was over £600k. The company never had to borrow a single pound to make it where it was pre-Covid. Today, I’m experiencing a 93 per cent loss in revenues due to the inactivity of events producers.”

The only loan Matthew was eligible for was the Bounce Back Loan, and he received £32,000 in May 2020. He is not sure he will be able to repay this loan as the business did not pick up. He also received the minimum furlough of around £700 when he could not work. His application for the Additional Restrictions Grant was rejected because he is home based. Matthew asked for a review of the decision but got no answer.

“It hasn’t been enough at all; I’m making plans to liquidate the company and move back to Belgium as I won’t be able to financially keep on covering my needs with the company’s savings and cash in the bank. The Bounce Back Loan should be turned into a grant. What needs to be offered now is psychological support for company directors. There needs to be a grant based on annual dividends for the main shareholder/company directors of companies employing less than five people.

“My business is definitely not going to survive this. Most of my friends who moved to the UK at the same time I did, six years ago, and working freelance in creative industries are planning to leave. I felt like the whole process was lacking humanity and consideration for the people whose first goal it is to actually create employment and grow the local economy. During those five years I’ve been fighting to tighten links between Paris’ leading fashion industry with UK based content creators. I’m still feeling ignored and this whole thing made me realise London might not be representing the ‘American dream’ of European creatives anymore.”

*Matthew asked us not to use his real name.

“With a new business, you’re trying to push into a world where everything is against you.” : Vincent Haye, owner of Zirrø

Vincent set up Zirrø in March 2020, delivering produce from local shops to customers in minimum packaging.

His business did not receive any government support because it was new and so couldn’t show revenue. Vincent set the business up as a limited company, meaning he couldn’t apply for self-employment grants.

“Initially I wasn’t home delivering; I was collecting containers from people at their offices. After a couple of weeks in business, all the office spaces closed down and we had to shift a bit. For a few months, we became just a community service helping people in self-isolation. At the beginning, because we were still testing operations, we did it for free and people were buying the groceries at the rate we were getting with the local shops. We just wanted to see how many groceries we could do.

“Covid made it much harder. I was looking for funding at the time, and one investor actually left because of Covid. I applied for a grant. I was told, ‘your application is going to go through’, and then a lot of the money rightly went to the local shops. The council withdrew my grant.

Vincent applied for a Zero Emissions Network grant from Hackney council, which aims to help businesses shift towards zero emissions. Vincent received £2,000, but didn’t get the money until eight months after he applied.

“A lot of start-up grants got frozen. In Hackney, there were a couple available for young businesses. You couldn’t apply because the funds had to go to the established businesses, shops and restaurants, rather than supporting a business that might not exist in a couple of months.

“It’s hard from a mental health perspective. You’re by yourself, trying to push into a world where everything is against you. I wish there was a fund for people in this situation giving you a minimum net salary. I was lucky I had some savings and people supporting me financially. Apart from that, I just had to apply for a new job, which, in a Covid world, is not the best timing.

“I think the business is going to survive. There are some more grants coming up that we can apply to. Even the communication from the council now seems to be towards recovery and how we can get start-ups to bring new jobs to local economies. I think we’ll get a lot more support now than we had during the lockdown.

“I heard about the Forgotten Three Million when I explained my situation to a friend. I might have missed some opportunities to apply for grants, but it was changing so much and there was so much conflicting information.”

Hackney council said: “The grant amounts are set by central government for the majority of the grant schemes and we publish these grant amounts on our website. Where the Council has discretion over the amount of grants that can be paid to businesses, this information is also published on our website.

“Detailed information on expected payment dates for grants is available on our website and kept updated regularly. There is an email address which businesses can contact to discuss their grant applications and emails are responded to directly by grants officers. In many cases the Council speaks to individual businesses regarding their applications. 

“There is a requirement set by the Government for local authorities to complete a pre-payment check of grant recipients prior to making grant payments. Our grant payments are processed through a cloud-based system that is unaffected by the cyberattack.”

Tomorrow: Meet the entrepreneurs of Covid