HM Treasury responded to a question on COVID-19 assistance for Directors on 22nd February 2021
The question: To ask the Chancellor of the Exchequer, what steps he is taking to progress a directors’ income support scheme package for directors of limited companies?
The response was made by Treasury minister Jesse Norman:
The Government always welcomes constructive proposals from stakeholders to improve the design of the Self-Employment Income Support Scheme (SEISS), including the suggestion for a Directors Income Support Scheme (DISS) from the Federation of Small Businesses, ForgottenLtd, Re Legal Consulting Ltd, and ACCA UK. This proposal aims to provide a new system for company directors, based on reported profits. The Government has considered this proposal in detail.
The DISS, as currently framed, is intrinsically reliant on self-certification. As the Government cannot readily verify this information, an effect of this reliance on self-certification is to open the scheme up to an unacceptable level of fraud by organised criminal groups and others who would seek to exploit the scheme. The Government cannot expose the tax system to these risks but continues to engage with the FSB regarding these concerns.
Directors are not self employed so do not qualify for the Self Employed Income Support Scheme (SEISS). They do qualify for the Coronavirus Job Retention Scheme, however would need to have had earnings declared on RTI FPS submission before 20th March 2020, or to qualify for the later scheme 30th October 2020. If no income was declared, then no qualification for CJRS would be applicable. There is no scheme that makes payments to cover dividends or retained profit within a limited company. For those who did receive an income, then they have qualified and been able to be placed on furlough and receive government grant.