COVID-19: What Help Is Available For Sole Directors?
Nothing specific has been announced yet ...
Posted by Roger Eddowes on 02/04/2020 @ 8:00AM
If you are the sole director, owner and employee of your own small limited company, you may be wondering what assistance the Government will offer you to help deal with the Coronavirus COVID-19 outbreak ...
The Government has not yet announced a COVID-19 support scheme for sole directors of small limited companies!
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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.
Until next time ...
Would you like to know more?
If you have any questions about what support is available for your business during the COVID-19 outbreak, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how I can help you.
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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