Coronavirus Support Package for Directors / Shareholders of small Limited Co's.

Provide a COVID-19 Support Package in line with that offered to the Employed and Self-Employed.

There are many owner managed businesses in the UK who own and operate under a Limited Company who have lost all their income like the employed and self-employed who have already been advised they will receive a support package.

Please make sure that they are looked after in line with the other taxpayers.

The Coronavirus Job Retention Scheme (CJRS) is available to employers and individuals, including owner-managers operating under a limited company, who pay themselves a salary through a PAYE scheme. Employers can use a portal to claim for 80 per cent of the usual monthly wage costs of furloughed employees (employees on a leave of absence) up to £2,500 a month, plus the associated Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions for that wage. This means owner-managers can furlough themselves and claim for 80 per cent of their usual monthly PAYE wage costs, up to £2,500 a month. More details about the CJRS are available at www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme.

Dividends are not covered by the CJRS. Income from dividends is a return on investment in the company, rather than wages; under current reporting mechanisms it is not possible for HM Revenue and Customs (HMRC) 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.

HMRC designed the Self-Employment Income Support Scheme (SEISS) using information they already had, in order to make it deliverable quickly and to minimise the risk of fraud. Expanding the scope would have required HMRC to collect and verify new information. This would have taken longer to deliver and put at risk the other schemes which the Government committed to delivering in a timely way.

Finally, these schemes supplement the other significant support the Government has announced. Individuals can benefit from the Government’s relaxation of the earnings rules (known as the Minimum Income Floor) in Universal Credit. Further support for UK businesses includes 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 at www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

HM Treasury

This is a revised response. The Petitions Committee requested a response which more directly addressed the request of the petition. You can find the original response towards the bottom of the petition page (https://petition.parliament.uk/petitions/310515)