Business lobby groups urge help for self-employed company directors

ForgottenLtd, Re Legal Consulting Ltd, FSB and ACCA have written to the Treasury to demand support for directors left out of the government's COVID support. 

The group argued that while the self-employed have been able to claim grants covering the significant majority of their incomes, the Treasury and HMRC have refused to enact a comparable scheme for company directors on the basis that it would be impossible to establish because many pay themselves in dividends and there is “no way” to ascertain whether such income is derived from business activity or other investments.

The group has urged Treasury to introduce a Directors Income Support Scheme (DISS), founded on the principles underpinning the Self-Employment Income Support Scheme, and drawing on details regarding trading profits and remuneration submitted by business owners to companies house – largely through corporate tax returns. 

Stressing the importance of companies to the UK’s economic recovery from, the groups warned that “hundreds of thousands have suffered severe financial hardship, and are now at serious risk of closure. Up to 7.5 million of their employees are at risk of unemployment”.

They add that, without immediate assistance, “we will see fewer businesses in existence, and fewer jobs – these cannot be furloughed, as they won’t exist anymore”.

The collective forecasts that the cost of its proposed scheme would be between £2 billion and £6 billion, depending on its scope. In contrast, last month, the National Audit Office (NAO) put the cost of government income support for employees at £55 billion.   

The latest statistics from the Department for Business, Enterprise and Industrial Strategy (BEIS) state that there are just under 1 million non-employing companies across the UK and 2 million that are classed as micro-entities (employing 10 people or less).