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<p>Those who pay themselves a salary through their own company are eligible for the
Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including
owner-managers, and individuals paying themselves a salary through a PAYE scheme are
eligible. Where furloughed directors, including companies with a sole director, need
to carry out particular duties to fulfil their statutory obligations, they may do
so provided it is no more than would reasonably be judged necessary for that purpose.</p><p>
</p><p>Dividends are not covered by the CJRS or the Self-Employment Income Support
Scheme (SEISS). Income from dividends is a return on investment in the company, rather
than wages. Under current reporting mechanisms it is not possible for HM Revenue and
Customs (HMRC) to distinguish between dividends derived from an individual’s own company
and dividends from other sources, and between dividends in lieu of employment income
and as returns from other corporate activity.</p><p> </p><p>The Government has worked
with stakeholders and carefully considered the case for providing a new system for
those who pay themselves through dividends. However, targeting additional support
for those who pay their wages via dividends is much more complex than existing income
support schemes. Unlike announced support schemes, which use information HMRC already
holds, it would require owner-managers to make a claim and submit information that
HMRC could not efficiently or consistently verify to ensure payments were made to
eligible companies, for eligible activity.</p><p> </p><p>The Government has heard
the suggestion made that HMRC could adopt a ‘pay now, claw back later’ approach. However,
such an approach would be highly resource-intensive to ensure appropriate compliance,
and there is a high risk that incorrect or fraudulent payments could not be recovered,
ultimately at the cost of UK taxpayers.</p><p> </p><p>The Chancellor of the Exchequer
has said there will be no further extension or changes to the SEISS or CJRS. However,
other support is available. The CJRS and SEISS continue to be just two elements of
a comprehensive package of support for individuals and businesses. This package includes
Bounce Back loans, tax deferrals, rental support, increased levels of Universal Credit,
mortgage holidays, and other business support grants. More information about the full
range of business support measures is available at <a href="http://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19"
target="_blank">www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19</a>.</p>
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