Treasury Division to Focus on COVID-19 Grant for Enterprise Managers
Government ministers are putting together a grant-based rescue plan for directors.
Business leaders and tax experts have drawn up plans to help up to 2 million entrepreneurs who depend on dividends for their income and have been excluded from COVID-19 relief.
The Directors Income Support Scheme, supported by the Federation of Small Businesses, Association of Chartered Certified Accountants, and the ForgottenLtd campaign group, would be a grant for small active businesses.
The system would function similarly to the Self-Employed Income Support System (SEISS). The first grant, which is three months, would represent 80 percent of median income, up to £ 7,500. It is estimated that the system would cost between £ 2 billion and £ 6 billion.
The director could only apply for a directorate in the company where he earns the greatest income, and that income must represent over 50 percent of all revenue from other sources, according to AccountingWEB. The director must state that he intends to continue acting and either:
- Affected by lower demand due to coronavirus but acting actively
- Temporarily not tradable due to the coronavirus, but traded beforehand
So far, the Treasury has been reluctant to support those affected because it could not distinguish between dividends from working and passive investments. As a result, directors could not benefit while their employees received support through the vacation program and self-employed received grants.
Craig Beaumont of the FSB said, “The directors got themselves set up and paid their taxes like everyone else, but not got the lifeline for income support.”
A Treasury Department spokesman said, “In certain circumstances, people may not be able to access ours [support] Regulations based on restrictions to reduce the risk of fraud. We continue to work with stakeholders on ideas that could adequately address these issues. “
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