Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate he has made of the number of limited company directors who have been unable to access the Government's covid-19 financial support schemes; and what plans he has to support those directors.

The roadmap for lifting restrictions set out by the Government is under way, and will allow the economy to reopen, demand to increase and life to slowly return to normal. The Government has confirmed that the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) will be closing at the end of September 2021 and the Government will maintain its focus on helping people back into work.

The Government acknowledges that it has not been possible to support everyone as they might want, and that some of the rules, criteria and conditions needed to ensure that the schemes worked for the vast majority have meant that some people did not qualify. However, the Government has acted in line with its policy principles to target support at those who need it most and to protect public money against fraud, error and abuse, while reaching as many people as possible.

The Government has explored a range of options to support COMs who pay themselves through dividends. However, HMRC do not have the data to identify the population of directors who remunerate themselves through dividends. The 3.3 million population of people who receive income from dividends includes working directors but also inactive directors, such as the spouses or children of working directors who are jointly listed as directors of companies, and general investors. Given that some external estimates suggest an active director population which varies from 710,000 to 1.8 million, providing financial support to the entire 3.3 million population could result in more than three out of four grants going to people to whom support is not intended. This would be neither a fair nor responsible use of taxpayers’ money.

HMRC also do not have data to verify what parts of a director’s remuneration to support and therefore the amount of support to which they might be entitled. Dividend income could be coming from multiple sources including investments, and not just dividends in lieu of salary.

As COMs are not self-employed, they cannot qualify for the SEISS. However, those who pay themselves a salary through PAYE from their own company may be eligible for the CJRS. Those ineligible for the CJRS and SEISS may still be eligible for other financial support, including the Restart Grant of up to £18,000 and the extension of the temporary £20 per week increase to the Universal Credit standard allowance for a further six months. The Government announced a £500 one-off payment to provide support to eligible Working Tax Credit claimants. All this builds on an existing package with spending of over £407 billion.