Hopes that sole traders classified as company directors – who have been excluded from state COVID-19 support – could get help have risen, with the Treasury looking at the DISS idea.

DISS stands for Directors Income Support Scheme, and it is a variant of the Self Employment Income Support Scheme (SEISS) set up by the government in the wake of the pandemic. It would target those sole trader business owners who are considered company directors and receive their income through dividends. This includes the likes of freelance musicians, engineers and plumbers – who all have not had any support to make it through the crisis.

As with SEISS, the DISS grants would provide these people with 80% of their trading profits, and they would be calculated using the tax returns they have submitted over the previous three years. The maximum amount that could be claimed for a single grant would be £7,500, and they would only be available to those earning below £50,000 per year – again, the same as with SEISS.

Given that around one million people have been shut out of existing state support schemes, there is certainly a demand, but the government has stated that it needs to find ways of preventing potential legal challenges, waste and fraudulent applications before it can be introduced. Allowing an accountant for sole traders in South Yorkshire or any other part of the country to apply on behalf of clients could help with these issues, but may not be permitted.

The Federation of Small Businesses initially proposed the idea for these grants last year.