To ask the Chancellor of the Exchequer, what steps the Government is taking to support small business owners that are unable to trade during the covid-19 outbreak and depend on dividends on their shares as their source of income.
1 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/