The below shows how HMRC really have no legitimate argument for excluding dividends in the total figure that directors of their own Ltd should receive as support from the govt.
The below was copied and pasted with permission from support group (https://www.facebook.com/groups/LtdCompanyDirectors/2524901024428608).
Here is HMRC's response to why dividends from his own Ltd are excluded even though for the self-employed govt support package, their one does included dividend income when calculating their total.
Dear Mr Strachan,
Thank you for your email of 8th April to the Chief Executive. I have been asked to reply. I am sorry to hear of your income concerns during the COVID-19 pandemic.
We know that some owner-managers of companies pay themselves a small wage, and top this up with dividends. But for the purposes of the Self-Employed Income Support Scheme (SEISS) and Coronavirus Job Retention Scheme (CJRS), we cannot distinguish these dividends from the dividends companies use to distribute profits to shareholders.
So that we can deliver the SEISS in June, we are designing it in a way that means we need no new information from customers. If we included owner-managers who pay themselves in dividends, we would need to collect and verify lots of new information, and this would take much longer.
You may be able to claim a CJRS grant to support your PAYE scheme. You can also find details of further government support for businesses online at: www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19
I hope you find this reply helpful.
Yours sincerely,
Policy Correspondence Unit | Solicitor's Office and Legal Services | HM Revenue and Customs
To which he replied back beautifully with...
Dear Francesca,
Thanks for your email which as you can imagine I read with great interest. I am afraid to report that your response is in no way helpful.
You say “…we cannot distinguish these dividends from the dividends companies use to distribute profits to shareholders.’ This is simply not true.
The truth is that for some perverse reason, devoid of any equitable or charitable rationale, you don’t want to a make the distinction.
I have the grand total of one share, for my own company, registered at Companies House for all to easily see. Most of the hundreds of thousands of excluded tax payers operate like me for well documented and legal reasons including because our employers insist we invoice them as limited companies.
Moreover, my accountant could easily provide a brief statement to confirm that I derive no income whatsoever from shares in other companies. Indeed, Directors UK (https://www.directors.uk.com/ the broadcast industry body that is lobbying on our and others behalf wrote to The Treasury at the end of March suggesting such a simple solution. I believe Directors UK has yet to receive a reply.
Please remember this, our dividend income is taxed. Not only that, you will be relying on these taxes, our income, to help pay the bill for all the financial assistance you are giving to others. This is, in anyone’s language, on every level or in any terms, unjust and unfair in the extreme.
Also, claiming you’re not going to help because it might take “much longer” is not a reason to deny millions a financial lifeline in this virus emergency. We are in peril right now and you have forgotten us. You are not doing all that it takes, we are not all in it together, you are not standing with me. This is the cruel reality of The Chancellor’s and HMRC’s unfair and inequitable schemes.
Once again I implore the HMRC to engage with reality and ensure there is equal and fair support for ALL tax payers.
Yours sincerely,
Peter Strachan
No response back from Francesca as yet... Its been a good few days now...
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IOD Proposal to the Treasury
This was sent to ALL MP's and Peers on Friday 17th April: https://drive.google.com/file/d/1Z9W7x_MX0TdcwRe5ggh3OIBiI6MWOw7G/view
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Parliament Petition
Please, please, please be sure to sign this Official Petition to keep the pressure on: https://petition.parliament.uk/petitions/310515 ones hosted on their website can hold more weight.
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