Excluded from Covid support: How one missed deadline made a man homeless

James Barnett was confused when a stranger banged on the door of the friend’s flat where he is sofa-surfing — because guests must be buzzed past the front-door — but he got a bigger shock when the intruder asked for him.

Barnett, a 28-year-old unemployed barber, is homeless. He sleeps on a friend’s couch while job seeking and saving for a rental deposit.

A debt collector had tracked down Barnett’s temporary address and was demanding his car, an old Audi TT, in repayment for debts worth over £10,000.

“He just turned up,” Barnett said. Luckily, Barnett managed to show the debt collector a court paper that sent him away empty handed. But it was worrying.

“I don’t even know how he got my friend’s address,” he said. “If my friend was here he probably would have thrown me out.”

Barnett’s life spiralled when he was excluded from drawing down income support under the government’s Self-Employment Income Support Scheme (SEISS), a coronavirus support measure for self-employed workers whose livelihoods were disrupted during the pandemic.

Barnett is one small drop in an ocean of three million people excluded from government Covid support schemes, according to National Audit Office figures. Over the past 18 months, campaigners, charities and MPs have repeatedly urged Chancellor Rishi Sunak to plug the gaps in government life-raft schemes, which they say have ruined lives, torn apart families and, according to nonprofit Excluded UK, been linked to 25 suicides so far.

“The government has swept the livelihoods of more than 3 million people under the rug,” Jamie Stone, chair of the Gaps in Support all-party parliamentary group (APPG), told The Big Issue.

“I have listened to countless stories of woe and loss. So many stories that should never have come to fruition but still did all because the Treasury would not acknowledge that there were gaps in its economic support schemes,” added Stone, a Scottish Liberal Democrat MP.

Before the pandemic Barnett was living in Whittlesey, Cambridgeshire, renting a £150-a-week chair at a barber shop. He’d been doing it less than a year and had not yet needed to submit a tax return for 2018-19.

Barnett loved the camaraderie of the job, meeting new people every day, and typically made £450 a week. “I used to be the happiest person in the world, you never used to be able to shut me up,” Barnett told The Big Issue.

The SEISS grant, launched by the Treasury on March 26 2020, offered self-employed people a taxable, lump cash sum worth 80 percent of average monthly income for a three-month period. (With a maximum grant of £7,500.) The SEISS was intended to save families from ruin whose livelihoods were upturned by the emergence of a deadly virus.

But when Barnett enrolled on the HM Revenue and Customs (HMRC) online portal that week, he said he encountered problems activating his account that made it impossible to file a tax return.

Gaps in support is immoral, incomprehensible and unforgivable.

Caroline Lucas, Green Party MP and co-chair of the APPG on Gaps in Support

Meanwhile, with lockdown enacted and income evaporating overnight, Barnett made the decision to move in with his girlfriend near Swansea, four hours’ drive away in south Wales.

Barnett missed the deadline to file his tax return on April 23, HMRC told The Big Issue after an internal check, meaning he was shut out of the first SEISS grant.

This is where Barnett and HMRC disagree on the facts of the case. Barnett said an activation error prevented him from enrolling on the self assessment service, necessary to file a tax return. HMRC disputes this. 

A HMRC spokesperson said it received no communications from Barnett about potential errors until after the April 23 deadline and that subsequent investigations — both internally by HMRC’s Complaints Investigation Manager and independently by the Adjudicator’s Office and the Parliamentary Ombudsman — found no evidence of a HMRC error preventing Barnett from filing his tax return on time.

Barnett knew he was eligible so tried to appeal. He’s thought to be one of around 200,000 newly self-employed people, according to figures cited by the National Audit Office last year, that were excluded for not yet filing a tax return, which is used to calculate SEISS grants.

He told The Big Issue it was “torturous” going round in bureaucratic circles, explaining on the phone what happened over and again to different HMRC staff.

HMRC even admitted it made an error, in documents seen by The Big Issue, sending Barnett a paper copy of the wrong tax year. (HMRC said this was after the deadline so did not impact his eligibility.)

But all Barnett’s appeals didn’t get him far.

The HMRC spokesperson said: “There is no legal right of appeal against decisions made in relation to the SEISS, and no provision for ‘reasonable excuse’ within the legal framework for SEISS.”

They added: “HMRC has limited discretion in operating the SEISS and this discretion can only be used in exceptional circumstances,” such as “situations where HMRC has made an error which has affected an individual’s eligibility for, or amount of, a SEISS grant.”

The Treasury, which sets SEISS eligibility rules, said: “Throughout this crisis our priority has been to protect lives and livelihoods, and the Self-Employment Income Support Scheme has supported nearly 3 million self-employed people.”

A spokesperson added: “While we acknowledge it has not been possible to support everyone in the way they might want, our schemes were designed to target support at those who need it most, while protecting public money against error, fraud and abuse.”

Barnett said he lost out on two grants of about £4,500 each — roughly £9,000 in total. But he still had finances outgoing like car repayments, insurance, TV finance, housing and other living costs. A bounceback loan put him £5,000 in the red and the debts stacked up from there. 

“I was stuck in Wales living with my girlfriend at the time when I knew I was buggered,” he said.

Today Barnett is chased by four debt collectors, he said, for debts between £10-15,000. And when lockdown ended, he didn’t have the money to return to Whittlesey to claim his old job. He was trapped in a vicious circle.

There are a variety of reasons people found themselves excluded. Alongside the newly self-employed, estimates cited by the National Audit Office last year suggest about 1.4 million people were excluded from SEISS because they did not get more than 50 percent of their income from being self-employed. A further 200,000 people were excluded for making profits above £50,000.

“These are all people who have been denied support and shut out of the schemes through no fault of their own,” said Sonali Joshi, Excluded UK’s founder and director of policy and communications.

Joshi said it’s “astounding that no discretion has been shown” in “harrowing cases” involving complex mental health problems.

Barnett connected with the office of Stephen Barclay, his Conservative local MP, and Excluded UK to file a HMRC complaint. But after internal investigations, HMRC maintained Barnett was at fault for not activating his account. 

Excluded UK, a grassroots nonprofit with over 30,000 members, helps people who have been forgotten by government support schemes access advice, mental health support and emergency loans.

“We’re effectively doing what the government should be doing,” Jennifer Griffiths, Excluded UK’s director of member welfare, told The Big Issue. She is lobbying the government to plug the gaps and launch a public enquiry.

Over summer, amongst all the debt and worry and stress, Barnett’s relationship with his girlfriend of two years was breaking down.

“She had to pay for everything,” he said. “And she just got tired of me being depressed all the time and having to spend all my time on the phone to the HMRC.”

They split. For a while Barnett was living out of his car. As he put it in an email to his MP, “I’ve basically lost everything.”

Caroline Lucas, co-chair of the Gaps in Support APPG, told The Big Issue state support has been a lifeline for millions, but: “Despite being very aware of the reality of its decisions, the government has refused to close the gaps in support or allow enough flexibility to meet need.”

“That’s immoral, incomprehensible and unforgivable.”

Barnett slipped through the gaps of the existing safety net. Now, the government plans to withdraw support, with the furlough ending and universal credit £1,040-a-year uplift axed this autumn.

In August Barnett returned to Whittlesey to sofa-surf. His mental health was deteriorating fast. Barnett is a survivor of two attempts to take his life since last March’s saga began, and has received support from the Excluded UK community.

Griffiths knows only too painfully the impact of being excluded. A friend makes up one of the 25 suicides directly linked to gaps in support. Griffiths, an unpaid full-time volunteer who has been shielding since March 2020, said whenever she feels exhausted, thinking of her friend’s experience gives her “more fire in my belly to keep fighting,” to make sure no one feels alone.

“It’s just common ground,” she said. “We’re like a forces family, we’ve got each other’s back.”

Barnett managed to claim later SEISS support. But the vicious circle did not stop. Driving to a job interview for a parcel courier role, he was turning on a roundabout when he could no longer change gears. The clutch was crunched. A trip to the garage later and he was another £1,500 down.

Now, Barnett is working as a courier saving up for a rental deposit and paying down debts.

He said finding the nonprofit’s Facebook group helped him feel a sense of community — it was reassuring to know there were 3 million people in a similar bind, fighting for the Treasury to take action. 

“It makes me feel better, that it’s not just me,” he said.

Readers impacted by the issues in this story can access the National Suicide Helpline on 0800 689 5652.