COVID-19: What Help Is Available For Sole Directors?

What sort of assistance is on offer to sole directors of small limited companies to help with the COVID-19 outbreak?

The Government have announced schemes for both the employed and the self-employed. We have the Coronavirus Job Retention Scheme (CJRS) and the Self-Employed Income Support Scheme (SEISS).

"Where's the help for directors of one-person limited companies?"

Sadly, there isn't as much help out there for sole directors at the moment. However, the Chancellor did announce when giving out details on the support for the self-employed, that directors could furlough themselves. Whilst they are furloughed they mustn’t do any business such as contact clients and suppliers, but a bit of statutory work like working on your accounts is deemed OK. sole directors are also employees of their own company.

If you go the CJRS route, remember, you can't just run out and set up a payroll today, as you have to have taken a salary using PAYE on 28th February. And, like many directors, you may be using PAYE to take a small salary each month then top up the rest with dividends. The Government is only paying 80% of what employees normally get, so if you've deliberately kept your monthly salary low, you won't get very much.

"This is a big problem for a lot of sole directors at the moment!"

As an accountant, I can tell you I have been asked a number of times if dividends can be paid as salary through PAYE instead. Sadly, and I wince every time I get asked this, the answer is no because it basically amounts to fraud.

So there has been nothing announced for sole directors of small limited companies and directors will need to look at other sources. These include, but certainly aren’t limited to:

- Deferred VAT and income tax payments
- Changes to accessibility for Universal Credit, and - Employment & Support allowance
- Statutory Sick Pay relief package for SMEs, which may be useful should you fall sick with the virus
- Business rates holidays, as well as the Small Business Grant Scheme
- Coronavirus Business Interruption Loan Scheme
- HMRC Time To Pay Scheme

I'm sorry to be the bearer of bad news right now, but there aren't even rumours of any sort of support package for sole directors of small limited companies. But don't give up hope, as the Government is making announcements every day, and I will be sure to update you if anything changes.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.