The Federation of Small Businesses (FSB) has urged the government to supply company directors with additional support during the coronavirus (COVID-19) pandemic.
The FSB has recently written a letter to Small Business Minister Paul Scully. The letter highlighted that self-employed company directors do not have access to the government’s Self-employment Income Support Scheme (SEISS). These directors often pay themselves a salary supplemented with company dividends. The SEISS permits eligible individuals to claim 80% of earnings, up to a maximum of £2,500 per month.
The business group stated that directors of limited companies can furlough themselves using the Coronavirus Job Retention Scheme (CJRS). But they are only allowed to claim for loss of Pay as You Earn (PAYE) income and not dividends.
To be able to claim this, directors who pay themselves annually would have needed to submit the information to HMRC by 19 March. However, many directors were unaware that this would be necessary.
Mike Cherry, National Chairman of the FSB 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.’