Directors: Pay

(asked on 21st April 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending Government support schemes in response to the covid-19 outbreak to include company directors who pay themselves through dividends.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 1st May 2020

Income from dividends is a return on investment in the company, rather than wages, and is not eligible for support through the Self-Employment Income Support Scheme or Coronavirus Job Retention Scheme (CJRS). 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 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 CJRS. Individuals who are not eligible for the CJRS may be able to access other support Government is providing, including 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.businesssupport.gov.uk/coronavirus-business-support/

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