Coronavirus: More support for business owners urged

31 March 2020  

Company directors, including garage owners, could end up falling through the cracks of government Coronavirus support, the Institute of Directors (IoD) has warned.

Edwin Morgan, Director of Policy at the IoD, said: “The Government deserves credit for acting quickly and producing a substantial package of measures to support the economy, and in particular the breathing room they have provided for directors on insolvency. In a situation as frantic and fast-moving as this, inevitably some gaps have opened up, but these need to be acted upon to prevent people and businesses falling through the cracks.”

Under the current support measures those, taking dividends instead of a salary from their business could find themselves without a safety net.

The IoD has suggested making it possible for company owner-directors to make a furlough claim at the 80% of monthly income, as is being offered to employees, providing they can provide a clean paper trail. The organisation is also urging greater co-operation from lenders, as well as support for businesses without premises.

More than 700 business leaders were recently surveyed by the IoD on the impact of the Covid-19 outbreak. 70% said it posed a high or severe threat to their organisation, up from 20% a month ago.

40% had already contacted their bank about an emergency loan, while slightly more had contacted HMRC to defer tax payments. Over 70% of directors have already seen demand for their products or services decrease, including 42% who had seen a significant decrease.

Edwin added: “The Chancellor has said that tax treatment of different forms of payment will need to be looked at when the dust has settled after this crisis, and there is certainly a case for reform. This is a discussion for the future, however, and company owner-directors need support now.”