Source · Select Committees · Business and Trade Committee
Recommendation 3
3
Paragraph: 19
The Committee accepts that there are some groups who have been at a comparative disadvantage,...
Recommendation
The Committee accepts that there are some groups who have been at a comparative disadvantage, such as those remunerated by dividends. The Government has cited administrative difficulties and the risk of fraud. The Government should consider solutions put forward on how income from dividends can be distinguished from unearned income from dividends.
Paragraph Reference:
19
Government Response
Acknowledged
HM Government
Acknowledged
24. We have engaged with various proposals put forward by stakeholder groups aimed at providing support to groups, such as Company Owner Directors (COMS), that are not currently eligible in order to see if any are viable. COMS are a diverse population and HMRC do not have data—as it is not needed for administering the tax system—to identify which Directors should receive financial support. The 3.3 million population of people who receive income from dividends includes working Directors but also inactive Directors (such as the spouses or children of working Directors who are jointly listed as Directors of companies) and general investors. Given that some external estimates suggest an active Director population varies from 710,000 to 1.8 million, providing financial support to the entire 3.3 million population could result in more than 3 out of 4 grants going to people to whom support is not intended. This would be neither a fair nor responsible use of taxpayer money. 25. The proposals we have considered primarily rely on self-certification to determine eligibility and they do not overcome the fundamental issues of protecting public money and safeguarding against fraud, error and abuse. Self-certification is feasible in instances where the Government can reasonably verify the declaration. Otherwise, it is far too susceptible to fraud which is why we have not been able to take forward many of the proposals presented by different stakeholder groups.