To ask the Chancellor of the Exchequer, if he will ensure that directors of businesses, who cannot be themselves be furloughed while administering the payments of their staff members on furlough, receive financial support comparable to that received by such members of staff; and what other steps he plans to take to support directors of small businesses during the covid-19 outbreak.
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of giving directors of limited companies capped access to the Self-employed Income Support Scheme of up to £2,500 per month; and if he will make a statement.
To ask the Chancellor of the Exchequer, what recent assessment he has made of the adequacy of the support available for self-employed people whose income primarily comes from dividends.
Those who pay themselves a salary through their own company may be eligible to claim for 80% of usual monthly wage costs, up to £2,500 a month, through the Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including personal service companies, and individuals paying themselves a salary through a PAYE scheme are eligible. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
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.
Those who are not eligible for the Coronavirus Job Retention Scheme might be able to access the other support Government is providing, including the Coronavirus Business Interruption Loan Scheme, the Bounce Back Loans Scheme for small businesses, and the deferral of tax payments. More information about the full range of business support measures is available at www.businesssupport.gov.uk/coronavirus-business-support/