The people who have fiddled the numbers to avoid paying tax or paying child maintenance. What will they do when they try to claim assistance due to CV?

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That’s it really.
If you’ve successfully hidden your actual income from HMRC to dodge paying tax or child maintenance, what are you planning to do?
If you’re the other parent in this scenario, how are you feeling at the moment? Is this karma? Or will it wind up being worse for you and your dc in the long run?
I’m not sure what to think.

I’ve name changed as I don’t want to link this thread to any previous threads regarding my own situation.
Been here a decade. Cutted up pear. Your minge! . Penis beaker yada yada.

Surely if this is the most tax efficient way of paying yourself most directors do this?

Most tax efficient means paying the least tax. You could pay yourself the same salary as the rest of your employees who will pay tax and NI etc on it. Most of the industry I work in is people who are essentially self employed as a director of a ltd co featuring only them. A lot have realised they can’t have it both ways and if they only get 80% of their PAYE then they understand that. The option was always there to pay themselves a higher salary which comes with more tax but they chose not to. They’ve been winning for years and are now losing for a couple of months. I wonder if after this more will look to pay themselves a more suitable salary rather than trying to minimise all that gives back.

I agree Lampy - I wouldn't be surprised if the whole system gets a shake up by the government after this. I get the impression they've only just got to grips with the various different ways small or one man band operations work.

Bahahahaha hadn't thought of this!

@lampygirl I do pay myself the same salary as the rest of my employees though, although mine is taken as a combination of PAYE and dividends, on the advice of my accountant. I pay tax on both, I don't know where people are getting the idea that self employed people don't pay tax from? We pay slightly less NI I gather, though not much, although also don't have access to things like holidays, maternity or sick pay.

I have no personal 'skin in the game' as it were, but I am chuckling as I listen to the radio and hear caller after caller saying that their self employed income has suddenly and inexplicably gone up this year and that if it's taken as an average of the last three years, how unfair it will be and how they won't be able to pay their bills, feed their family etc. If that were true, it makes me wonder how they all managed before, when their declared income was apparently so much lower?

It's going to be very interesting. I'm wondering how many clients will all of a sudden remember to tell me about their side line business that's been trading for the last 7 years 🤷‍♂️

Wonder what will happen to all the “boss babe”, “full time mummy” MLM people who’ve spent ages posting their holidays, cars and kitchens. 80% of nothing is nothing and who is going to prioritise buying second rate make up and aloe vera that magically cures cancer now.

The point is, I'm not on the fiddle, I declare my earnings, pay (plenty of) tax and employ 4 other people.

I set my business up from nothing and have tried to do everything the right way.

This country supposedly needs small businesses like mine to keep the economy afloat but its not until something like this happens that you realise how much contempt other people have for self employed workers, despite the amount of money my business has paid in tax which has gone into the public purse. I followed the advice of my accountant as that isn't my strong area and always assumed they knew better than me about the best way to pay myself, but now I'm potentially going to penalised for that. As long as its giving you all a good laugh though eh?

I might have mis-interpreted this, you cannot furlough a Director. Self employed are sole traders, CIS contractors etc. Directors of limited companies are not self employed. Some owners of companies may be included if they are a director of a holding company which owns a company that they are employed by as a worker.

@RickSanchez Nobody is laughing, I'd hope. The country would be well and truly screwed with us.

@RickSanchez then you don’t pay yourself the same salary, you pay less salary in the traditional sense, plus take dividends. My dad is in the same boat so I’m not having a go and I didn’t say you pay no tax. There is an additional tax free allowance on dividends and if you pay basic rate tax I think dividends is something like 7 or 8% rather than the 20 on PAYE.

Unfortunately like many things, a few have spoilt it for the many IMO. There are traders who take cash and don’t declare it etc which can’t be done PAYE. Maybe these people learning this will in the long run make it better for all if they do stop spoiling it for the many, though I doubt it.

We are both directors of our limited company. Unlike the other companies doing the same thing in the same area, we take card and cheque payment alongside cash because we declare everything so it makes no difference to us.

As directors, it doesn't appear that we can be furloughed so we probably won't get anything, although I am very grateful that our member of staff will.

We have been advised however that smaller businesses like ours, that qualify for business rate relief, are entitled to a grant to help us get up and running again once this is over so fingers crossed.

I’ve obviously lived a very sheltered life, but I’ve seen MLM referenced on a couple of threads today. What is it?

Multi level marketing.

RickSanchez my DH is the same although he's a freelancer and doesn't employ anyone. The companies he works for insist that all freelancers are limited.
It's not like he's not taxed on the dividends either. It's not a tax dodge at all, it's all but the book and he'd be happy to be audited.
If they exclude dividends we're screwed.

There are so many people doing things to deliberatly screw hmrc it's about time they got a taste of their own medicine

I'm excluding genuine buisness who pay tax etc but for the avoiders....I have zero fucks to give right now

here'll be plenty of bosses with salaried staff claiming they've furloughed them to get the 80% when the staff are still working on the quiet

Not really - because there are systems in place to do real time figures - you have to report to HMRC who you have paid every month and how much.

I could not be happier about this as my ex has been depriving his child for a decade whilst living the high life, karma indeed. And they won't get away with not paying maintenance as they're being given money by the government, no hiding that. Prior to the announcement about help for the self employed I was fully expecting a call from CMS to say once again I'd no longer be receiving anything.
Half the people I know are self employed and I feel for those who were genuine and honest but a lot of them weren't and I can't summon any sympathy for them.

The thing about taking pay as salary and dividends is that it is legal, its not a loophole, its not even a dodge, its just the most sensible way to do it. And I still pay tax on dividends.

I think everyone assumes if you're self employed you're hiding cash left, right and centre, not declaring it and are constantly on the fiddle. This isn't the case for the self employed people I know but I appreciate this isn't the case for everyone. I actually find some of the stories on this thread quite shocking.

I employ an accountant who does all of my accounts, tax stuff, expenses, receipts and payroll because I'm not an expert in any of that stuff and want to have that time to focus on doing my day job and managing my staff. I pay him because he makes sure I am doing things correctly. Surely any accountant it going to advise their client to pay themselves in the most sensible way.

Funnily enough, my partner and I had the same conversation last night and had a little chuckle!

I wondered why my BIL was ranting about getting fucked over - he won’t declare his earnings either. Good.

I started my own business a couple of years ago

I've always declared my earnings and paid my taxes in full and on time

I sleep well at night, in the knowledge that I am NOT fiddling the system

Please do not lump everyone into the same category

Well if you pay yourself dividends they count as income and go on your tax return. So they would count for child maintenance etc. It's people that are not declaring income by taking cash payments etc that I believe the OP is referring to.

This is literally the one and only positive outcome of this utter disaster. So pleased for their demise.

@RickSanchez I hope the dividend payments are somehow accounted for in all this. Good luck to you.

There shouldn't be an tax efficiency. You receive x you pay y tax, should be the same for all income, whether it's dividends, salary, profit, whatever. If you've managed your income to pay less tax, you'll have to take the consequences, regardless of whether it was legal .