Not only are they self-employed, many employ staff likely to be made redundant when furlough ceases
The Treasury must throw a lifeline to the tens of thousands of limited company business owners before it is too late.
Many are self employed, but also employ staff who are currently on furlough and will almost certainly be made redundant by business owners who have had or no income since the start of the Covid crisis. Failure to support these businesses will result in thousands of self employed firms going to the wall.
According to the UK200Group, whose members represent 150,000 SMEs, a straightforward HMRC submission can easily demonstrate eligibility for a scheme similar to the Self Employed Income Support Scheme (SEISS).
All it needs is for individuals or their accountants, to submit the dividend income from the company, found on their tax return, plus details of any other self employed or employed income.
Says Andrew Jackson, Head of Corporate Tax, Fiander Tovell and Chair of the Tax Panel of the UK200Group;
“This is not just a political decision, it is an economic imperative and it is not too late for the Chancellor to reconsider. To treat some SMEs differently to others is plainly unfair, when they do the same job but choose to run their business as a Limited Company. Similarly many other businesses owners also need urgent help including recently self-employed and newly incorporated businesses and this who have a mixture of employed and self employed work, i.e. the gig economy.
“It is simple for HMRC to set up a system for Limited Company owners to claim the equivalent of SEISS if they can demonstrate a financial need. HMRC can easily 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. »