Rishi Sunak’s team is said to be looking at the plan, but there’s a long way to go (Image: Reuters)
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Up to 700,000 small business owners excluded from Covid support could be in line for a bailout, it is reported.
Treasury officials are said to be considering a grant that would pay sole directors of limited firms up to £7,500 of lost trading profits.
Directors who pay themselves through dividends were one of the main groups of people excluded from bailouts last year.
Chancellor Rishi Sunak refused to include them in two main schemes, due to fears shareholders who get dividends would also get a payout.
But his officials are now “actively considering” a solution by campaigners, experts and the Federation of Small Businesses, it was reported.
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A government source warned the Mirror the plan may not work, because there are still questions about how directors would be distinguished from other shareholders.
But a source told The Sun campaigners had a “productive meeting” with Treasury minister Jesse Norman who is “looking at” the proposal.
The newspaper suggested the £3bn programme could be called the Directors Income Support Scheme.
It would pay up to 80% of lost profits for sole directors of limited companies for up to three months, to a cap of £7,500.
It would also be limited to those who earn less than £50,000 a year – mirroring many rules from the self-employment grant scheme.
Many venues have been shut again in tiers and the third lockdown (stock photo)
(Image: Daily Mirror)
And directors would have to prove demand had reduced due to the pandemic.
A Treasury spokesman said: “Our support schemes are designed to get help to those who need it most whilst protecting the taxpayer from fraud, but of course we keep everything under review and are always open to further ideas.”
It comes after the National Audit Office said 700,000 limited company directors who pay themselves via dividends were excluded from the two main support schemes – furlough and self-employment grants.
The Forgotten Ltd campaign, which helped drawn up the proposal, says while some can get business loans they are not always “realistic”.
Overall 2.9million people were excluded from government support schemes, according to the NAO.
Chancellor Rishi Sunak has previously insisted not all of them were left out – and that some were excluded for good reason.
1.4million were excluded from self-employment grants because less than 50% of their past income came from working for themselves.
Another 200,000 started up their business too recently so didn’t have enough history for the government to approve a bailout.