Companies: Coronavirus

Treasury written question – answered on 5th May 2020.

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Photo of Baroness Benjamin Baroness Benjamin Liberal Democrat

To ask Her Majesty's Government what assessment they have made of the suitability of current COVID-19 support schemes for single person companies where the worker draws dividends in lieu of a salary from the company.

Photo of Lord Agnew of Oulton Lord Agnew of Oulton Minister of State (HM Treasury), Minister of State (Cabinet Office)

Income from dividends is a return on investment in the company, rather than wages, and is not eligible for support. Under current reporting mechanisms it is not possible for HM Revenue and Customs to distinguish between dividends derived from an individual’s own company and dividends from other sources, and between dividends in lieu of employment income and as returns from other corporate activity. Expanding the scope would require HMRC to collect and verify new information. This would take longer to deliver and put at risk the other schemes which the Government is committed to delivering as quickly as possible.

Individuals who are not eligible for the Coronavirus Job Retention Scheme or the Self-Employment Income Support Scheme may be able to access other support Government is providing, including the Bounce Back Loans Scheme for small businesses, the Coronavirus Business Interruption Loan Scheme, and the deferral of tax payments. More information about the full range of business support measures is available on GOV.UK.

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