Company directors have fallen through the cracks of various business support measures and are in urgent need of help, says the Federation of Small Businesses (FSB).
The Federation has written to Small Business Secretary Paul Scully MP to flag the fact that self-employed company directors – who often pay themselves a salary topped up with company dividends – do not have access to the Coronavirus Self-Employment Income Support Scheme (SEISS), which allows those eligible to claim 80 per cent of earnings up to a maximum of £2,500 a month.
Limited company directors can furlough themselves through the Job Retention Scheme, but can only claim for loss of PAYE income and not dividends, despite paying both corporation tax and dividend taxation before they are taken.
However, to claim for this, directors who pay themselves annually would have needed to have submitted information to HMRC by March 19 – and many were unaware of this.
The letter, which responded to the Small Business Minister’s call for ideas on how to help the self-employed during these unprecedented times, came hours before Prime Minister Boris Johnson announced he was ‘looking at’ options for this group of people on May 27.
The FSB is calling for direct income support for directors’ lost dividends and the creation of a grant scheme for businesses that have been unable to claim grants attached to physical premises, but still have high fixed costs.
FSB National Chairman Mike Cherry said: “The business support measures currently in place help the vast majority, but they don’t help everyone. Business owners who have contributed for years through corporation and dividend tax are now suffering purely because of the way they pay themselves. They need help, and they need it fast.”