Mr Starmer adds: “He has to establish an average taxable profit level over a three-year period equivalent to what a salary level for a salaried person might be.
“This is achievable but after a complicated process which will bring delays although the benefits are potentially the same as for an employed person and backdated to 1 March.
“Those who lose out are the newly self-employed who will have to fall back on Universal Credits and/or a Business Interruption loan.”
When the lock down is lifted and the economy does start to recover it might be time for advisers discuss how shareholder directors are going to pay themselves going forward.
Mark Hook, a tax partner at accountants Rowleys, points out that if director shareholders are going to take more of their monthly pay as a salary then they will end up paying more income tax and national insurance, which is what the chancellor has already indicated he wants to happen.
Mr Hook adds: “As with all businesses the current crisis has brought about an opportunity to look at things differently and take stock. HMRC is under additional pressure in some ways with the Covid 19 schemes being developed and launched.
“However, we believe HMRC also has an opportunity to look at the tax system overall and how it can be simplified. The system has become so complex, the cost and time to do this may put the government off.”
Mr Starmer says although many financial advisers will not have been involved in the tax/NI planning - as this would probably be more the accountant’s territory - they will understand financial consequences and have encouraged clients to save for the future or a rainy day through Isas and pension contributions as well as a liquid emergency funds; in bank, building society or premium bonds.
Mr Starmer adds: “A financial adviser will come into his or her own in helping their client release the capital and/or income required to get them and their family through this difficult time.
A new approach
“I do not think that financial advisers will need to change their approach to advising clients as a result of the Coronavirus pandemic because we have always had to consider all potential financial outcomes and build in financial flexibility to our advice.
“The potential reasons for a client`s financial difficulties, short or long term, are many and varied. This is just one more to add to the list albeit exceedingly widespread for non retired clients.”
