Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether sole trader directors receiving a single dividend from their company can be included in the (a) Self-employment Income Support Scheme and (b) Coronavirus Job Retention Scheme if they submit their certificate of incorporation from Companies House.

The Government’s priority has been to support as many people as it can, as quickly as possible. The Self-Employment Income Support Scheme (SEISS) and the Coronavirus Job Retention Scheme (CJRS) were designed to use information HMRC already holds, to ensure they could be delivered in a timely way and that the fraud risk is minimised. 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 (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. Expanding the scope of these schemes would therefore require HMRC to collect and verify by hand new information, which would take much longer to deliver. It could put at risk the other schemes which the Government is committed to delivering as quickly as possible.

These schemes supplement other significant, unprecedented financial support announced for individuals and UK businesses, including: the relaxation of the earnings rules (known as the Minimum Income Floor) in Universal Credit, 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.