Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential scope for fraud in claims by directors of limited companies in respect of future financial support provided in response to the covid-19 outbreak.

The Government has prioritised delivering support to as many people as possible, as quickly as possible, while guarding against the risk of fraud or abuse. This meant making difficult decisions, and the Government has acknowledged that it has not been able to support everyone as they would want.

The practical issues that prevented the Government from being able to include company owner-managers in the original Self-Employment Income Support Scheme (SEISS), namely not being able to verify the source of their dividend income without introducing unacceptable fraud risk, still remain.

Similarly, it would not be appropriate for the Coronavirus Job Retention Scheme (CJRS), designed to replace the immediate costs of employment, to be used to replace a distribution of net profits that have yet to be determined.

Opening up the CJRS or SEISS scheme to cover dividends, for which no up-to-date accurate data source is available, would either have required allowing “pay now check later” claims, which HMRC could not realistically have policed, or added one-to-one manual review steps which would have drastically slowed down payments and required unfeasible amounts of resources to process.

Company owner-managers may still be eligible for other support available including CJRS (in respect of their salary but not their dividends), Bounce Back loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.