Originally written by Timothy Adler on Small Business
The government is listening to retailers about being allowed to bring back furloughed staff on a part-time basis, according to one senior source.
Although independent retailers are being asked to reopen from June, the Coronavirus Job Retention Scheme will only allow part-time furlough from August.
Given a cratered economy and uncertain demand, retailers are asking why the government insists on this all-or-nothing approach.
Some shops are gingerly reopening towards the end of the working week but would have to pay staff taken off furlough fully time.
“Part-time furlough has been raised by retailers and a number of MPs. It’s something that we’re looking at and try to respond to,” said the source.
“By extending the furlough scheme in the first place, and then extending it a second time, it shows that we’re listening. We do listen and hope we’re being seen to be flexible and responsive.
“Businesses are burning though cash with no changed in fixed costs. We are never going to have had perfection implementing schemes at such speed and scale.”
Self-employed owner-directors
Meanwhile, the government is still thinking about how to open up the Self-Employed Income Support Scheme (SEISS) to self-employed owner directors.
The problem, said the source, is that
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Small business minister trying to help owner-directors hit by coronavirus
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small business minister Paul Scully is trying to help the 1.6m owner-directors shut out of coronavirus government business support schemes.
Although Treasury has said that owner-directors of small businesses could furlough themselves through the Coronavirus Job Retention Scheme, as a company director you can only pay yourself up to £800 through PAYE – which means you have to take the balance of salary as dividends.
For somebody earning £800 per month through PAYE, this would equate to a monthly income of £640.
Mr Scully, speaking during a webinar hosted by accountancy software firm Intuit on Wednesday, he wanted to get money “asap” to owner-directors who “are falling between the cracks” of government coronavirus schemes.
However, the problem is, according to Mr Scully, that the tax system doesn’t differentiate between dividends as part of pay and dividends earned as passive investment income from shares.
There is also a public perception issue as government would not want to be seen to be rewarding company directors who already pay less tax than those paying in through PAYE. Basic tax on dividends is 7.5 per cent; the basic income tax rate is 20 per cent on top of national insurance contributions.
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