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Northern Ireland Launches COVID-19 Support Scheme for Directors

Posted on Jan. 15, 2021

Directors of companies based and operating in Northern Ireland will be able to claim a one-off taxable grant of £1,000 under a limited company directors support scheme, Economy Minister Diane Dodds announced.

“Many company directors who have been adversely affected by COVID have found themselves in financial difficulty. I am pleased that we are able to help address the gap in national support for this group by introducing a local support scheme," Dodds said in a January 14 release.

Members of the U.K. Parliament approved on January 13 a motion allowing Labour MP Tracy Brabin and a cross-party group of sponsors to bring forward a private members’ bill requiring the U.K. government to address gaps in financial support provided to individuals, businesses, and industries, and report to Parliament on the steps it intends to take regarding those gaps. Tax professionals are scheduled to give evidence to the House of Commons Treasury Committee regarding the gaps in support on January 20.

Dodds said £20 million will be available for the Northern Ireland scheme, which will open for applications on January 21. A £1,000 grant will be paid to eligible directors. When the scheme closes, any remaining amounts will be “distributed equally amongst approved applicants in the form of a top-up grant, up to a maximum of £3,500,” according to the release.

The scheme will be administered on behalf of the Department for the Economy by Invest Northern Ireland, which set out the conditions in a separate release. To be eligible, a director must be resident in Northern Ireland, be a “person with significant control” in the company, and meet several other conditions relating to income and the pandemic’s impact on the business.

“At 31 March 2020 (prior to COVID-19) at least 50 percent of your income [must have come] from your director’s remuneration (salary) and dividends,” the release said. Projected remuneration and dividends from the company for 2020-2021 must be 40 percent lower than it would have been in the absence of the coronavirus, and total projected taxable income for 2020-2021 must be less than £50,000.

Roger Pollen, head of external affairs for Northern Ireland at the Federation of Small Businesses, gave the scheme a cautious welcome. “While many support schemes have been brought forward by [the] U.K. government and the Northern Ireland executive, regrettably company directors have consistently fallen through the gaps and been unable to access support. Therefore, we very much welcome the launch of the [scheme] today, particularly as this is an area where [the] U.K. government has still not taken action,” he said in a release.

The initial level of support is “very modest,” Pollen noted. “It is a good first step, which we hope will be followed by more generous resource[s] to assist those directors who have yet to receive support almost a year after the pandemic began," he added. "We would hope that this initiative will be followed by further assistance, so it is vital that any eligible business owner engages with the scheme during this initial phase so that the size of the potential pool of applicants can be established and further interventions secured and distributed.”

Newly Self-Employed Support Scheme

On January 7, Dodds announced that the deadline for the region’s newly self-employed support scheme had been extended to February 5.

That scheme, which was opened December 3, 2020, “provides financial support to newly self-employed individuals . . . whose business has been adversely impacted by COVID” and who have not been able to access support from the U.K. government’s self-employed income support scheme, the Department for the Economy said.

“It is important that this scheme covers as many self-employed as the budget will allow. These grants will help hundreds of businesses across Northern Ireland and I am confident that the revised closing date and change to the criteria will allow many more newly self-employed to avail of much-needed support at this difficult time,” Dodds said.

A one-off taxable grant of £3,500 will be provided to those who commenced self-employment between April 6, 2019, and April 5, 2020, and meet the scheme’s other conditions, which are set out on the Invest Northern Ireland website.

Coronavirus-related support provided in Scotland and Wales is set out on the Scottish and Welsh government websites.

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