The chair of the Treasury select committee has called for chancellor Rishi Sunak to “iron out” deficiencies in the government’s relief measures for small businesses – arguing that “some people have slipped through the net.”
As reported last week by the Financial Times, former financial secretary to the Treasury Mel Stride made the comments after a virtual meeting of the committee last Tuesday, alongside a claim that “more help was needed” specifically for owner-directors who were paid through dividends and were thus currently ineligible for income support.
In reference to Sunak’s previous pledge to “iron out” just these very kinks in support packages being proffered, Stride said that the chancellor had “done a great deal to support the economy, but he shouldn’t be putting away the ironing board just yet.”
The Treasury has previously stated that determining salary in the form of dividends to directors would be impractical – citing difficulty in establishing exactly which revenue stream constituted direct “income” as opposed to share gains.
But Stride cast some doubt as to this explanation – arguing that the government may be tightening its purse strings to those it considers to be tax averse. “The suspicion here is, to a degree, is the Treasury treating the self-employed differently because actually they see dividends as part of tax planning and lowering tax bills and they are less sympathetic to it?” he posited. “That’s a view that’s out there.”