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Coronavirus Job Retention Scheme: Directors

Treasury written question – answered on 4th May 2020.

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Photo of David Mundell David Mundell Conservative, Dumfriesshire, Clydesdale and Tweeddale

To ask the Chancellor of the Exchequer, if he will allow dividend income from an employer to be taken into account when calculating the income of directors of small private companies for the purposes of the Coronavirus Job retention scheme.

Photo of Stephen Farry Stephen Farry Alliance, North Down

To ask the Chancellor of the Exchequer, whether his Department plans to consider dividends in determining income of business owners under the Coronavirus Job Retention Scheme.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

To ask the Chancellor of the Exchequer, what plans he has to provide support for people who are self-employed and who are paid primarily through dividends.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

Those who pay themselves a salary through their own company may be eligible to claim for 80% of usual monthly wages, 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.

The Government’s priority has been to support as many people as it possibly can, and as quickly as possible. 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 and any such proposal would need to be considered against 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 may be able to access 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/

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