To ask Her Majesty's Government what consideration they have given to extending the Self-Employment Income Support Scheme to those who operate a limited company and take dividends as a source of income.
Answered on
20 May 2020
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 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.
However, those who pay themselves a salary through their own company may instead be eligible for the Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including personal service companies, and individuals paying themselves a salary through a PAYE scheme are eligible. For clarity, dividends are not covered by the CJRS.
Individuals who are not eligible for the Coronavirus Job Retention Scheme or the Self-Employment Income Support Scheme may have access to other support which the Government is providing, including 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 on gov.uk.