Treasury to throw lifeline to business owners who currently cannot claim support
Tens of thousands of SME business owners stand to benefit from the chancellor’s likely extension of the Self-Employment Income Support Scheme (SEISS).
The new provision will allow owners of Limited companies, many of whom are effectively ‘self-employed’, but choose to run their business through a Limited company and pay themselves a mix of salary and dividend payments to claim SEISS.
The UK200Group, whose members represent 150,000 SMEs says a process for allowing what are mostly one-person companies to claim SEISS could be simple. All it would require is for individuals, or their accountants, to submit the dividend income from their companies found on their tax return plus details of any other self-employed or employed income.
Andrew Jackson, head of corporate Tax, Fiander Tovell and chair of the tax panel of the UK200Group comments:
“It should be easy for HMRC to set up a system whereby Limited company owners could claim the equivalent of SEISS. The system poses no particular risk of fraud and HMRC can check all the information for accuracy as they have access to the individual’s tax return and company report and accounts. This is exactly how normal tax returns work, and indeed how the furlough system works. All that is required is the political will and we welcome the news that the chancellor is looking at ways to address this issue”
“The UK200Group has been calling for urgent changes to the way small business owners can access funding. We recently carried out research that showed 30% of SMEs don’t expect to survive this current crisis and in my experience, many of these will be business owners, who are effectively self-employed, but run their business as a Limited company”.
