From comfortably off to benefits overnight - I can’t believe this is happening to us

[greatbighillofhope]

My husband and I own and run a business together which has closed due to corona. We have overheads that still must be paid and also suppliers to pay. We could never foresee a scenario where we would be unable to trade other than fire or flood. Even in the case of illness/death we could still trade as we employ staff who could keep it going for periods without either of us. Regardless, we have insurance cover for all those eventualities.
Because we cannot trade now our rainy day savings are more than wiped out paying our continuing overheads and suppliers. We have gone from being entirely secure with a good income to having absolutely nothing overnight.
We have been 26 years in business, we have declared every penny of income and paid every tax in full and on time.
Thanks to Rishi Sunak’s bizarrely unfair self employed support scheme our family can claim nothing. I feel so let down, left behind and forgotten about.
It is incredibly unfair that someone whose business has been only mildly affected may still be eligible, can now claim 80% and also continue to trade. Why do we get nothing In this scheme when we have nothing to live on?
I have put in an online claim for universal support. I think our family could be eligible for around £500 per month (including carers allowance as our son has special needs). it won’t cover our expenses as our lifestyle is based on a much higher income. We can cut down on many things of course but It won’t even cover our fixed costs.
But, I cannot get through by phone to UC to book a telephone appointment. I tried all day yesterday, but the line keeps cutting off. at one point I had been on hold for 1.5 hours before it just cut me off. What else can we do?

Oh no no no, eg a company turning over £300k per annum will pay around £30k in VAT, less staff wages and contributions, other operating costs leaving say £80k in profit which will be taxed at 20% less £16k. Then if i take a salary by dividend ld pay a further 7.5% or 12.5% depending on how much taken. Less government allowances but my point is i have already paid £46k in tax BEFORE i earn a penny!!!!!!! At least the employed have the benefit of earning £12.5k before paying any tax!

I’m very sorry you’re going through this. I have no advice but sending you love and hood wishes xxxx

@sussexman oh yes he did, listen to his comments the same night he said he’d help the self employed

The OP has already said she earns over 50k so can we please stop going on about splitting it!

OP I really feel for you. They really did a number on the self employed who earn over 50k. And then said what @LittleGift said implying we will pay more tax. I wouldn't mind that but when you're entitled to bugger all you're effectively getting shafted both ways.

I've read a lot of comments from people on these threads and it demonstrates the ignorance around the self employed. That we are all 'tax dodgers' and deserve everything coming. I've never tax dodged in life and am not eligible for any support for earning over a threshold that's not imposed on the employed. It's really unjust.

Your accountant is wrong.

You and your partner will be submitting individual self assessment tax returns, presumably splitting your profit 50 50.

So if your share of the profit is £25k then you are eligible for government

help.

Get a better accountant and think seriously about becoming a Ltd company.

UYScuti this assumes that all self-employed people who are falling through the gaps are in a privileged position. I don’t believe that to be the case. There are also a lot of very privileged employees who will benefit.

Chips I can’t see where the op has stated she personally earns over £50k?

@greatbighillofhope Someone else may have said this (sorry only read 3 pages of the thread) but I'm sure that if you are in a partnership then it's still 50k max each. It's not 50k total - the guidance specifically says members of partnerships can apply and that the max is 50k trading profits. It would say specifically if that was 50k total for the partnership (and that wouldn't make any sense anyway - I know you are married to your partner but lots of partners won't be so no reason to have their ability to claim the grant depend on total profits). I assume you split partnership profits equally between you. So if the partnership business makes less than 100k profits you should both be able to claim the self-employed grant to cover 80% of each of your share of the partnership profits. If your accountant hasn't spotted this I would be getting a different accountant.

This sounds really shitty for you. There's no other way of describing it, it must be bloody awful.

This economic collapse is really, really crap for so many people, but that doesn't make it any better to know that other people are also affected.

I wish you all the best.

Have you spoken to your local growth hub, these are across the country set up to help businesses. I don’t know where you live so can’t say where you’re local one is but that should be your first point of call as a business owner. I hope you can get the support you need x

I think individual circumstances need to be taken into account here. It shouldn’t be about being self employed or being a company employee. If the cap is put on one surely the employed earning above £50k should also have a cap. There is a big difference between some of the self employed out there. When Sunak said the average profits made by the remaining 5% was £200k I nearly fell off my seat. There is big difference between £51k and £200k. Also perhaps dependents should be taken into account etc. Etc. For someone like my parter who pays all required tax, is currently the sole breadwinner and is an essential worker still risking his life daily to acknowledge the fact that when the work dries up we might not be able to feed our child, it is heartbreaking.

@MarshaBraydo the OPs post at 10.00 yesterday says they both made over 50k each for the past three years.

Have you checked your business insurance policy? A couple of insurers (NIG aka mine, AXA and Aviva) have confirmed no cover but others may provide for you.
It sounds like you are eligible for the business interruption loan but won't apply because you don't know how long it will take to get the money, yet you would have been prepared to wait until June for the self employed help. I suggest you get your loan application in quick sharpish if things are that desperate. You can bet your bottom dollar it won't take until June.

Oh right yes thanks Chips I see it.

I’m sorry you’re in this situation.
I hope some of the skills you used to create, build, & successfully manage your business help you deal with this.
Best wishes.

We are the same - that’s how I understand it and accountant advises it. Small Ltd company, basic paye wage and topped up by dividends. Dividends however are still taxed and we pay corporation tax too (in response to poster who suggested we are freeloaders/avoiding tax). I could furlough myself for 80% of my 12.5k per year paye income. This only gives a few hundred a month and to do this we won’t not be able to work in the business to keep it ticking over/meeting it’s legal obligations. Only option seems to be borrow borrow borrow

I’m so sorry for you OP.

The economic consequences of this will be vast. We have different circumstances, but I am also very worried about the future.

I would get some advice:

A) I thought it was £50,000 per annum
B) ring your mortgage company for a 3 month freeze
C) the supermarkets are all offering employment and this would make an excellent stop gap

Good luck.

greatbighillofhope I completely understand we are in exactly the same position. I registered for UC following the chancellors SE announcement last week :(
We are both self employed in our long established business & also employ staff. As our profits are too high we do not qualify. However we work in the tourist industry so have been closed over winter & having only just opened we were ready for the crazy season ahead. Profits do not equal money in the bank! Our bank balance after winter is therefore at its lowest point as we invest into improvements over winter & then the big bills come in. This is not bad planning this is normal in our industry as we are usually hitting the busy Easter/ bank hols & summer. I am now refunding all our visitors due in which will wipe us out. Between us we literally have £137.60 income from child benefit for March as cannot afford to pay ourselves . This will affect us at least into 2021 if we survive it at all.
Really understand how u feel xx

#greatbighillofhope I'd say forget the supermarket; you'll probably be eligible for more in UC and any earnings from supermarket would be offset against the UC, so you'd be no better off.
I am in a similar position. Lost my job just before all the hoohah really kicked off. Reasonable salary covered (just) all outgoings. Husband self employed in building trade. All recruitment in my line of work has stopped, building sites closed or closing. I have gone from working in a decent office job to stretch wrapping pallets in a supermarket warehouse on less than half my usual wage. Hoping mortgage will give me payment break, stopping paying anything non essential (they'll just have to wait) and hoping this doesn't last too long. I fell your pain, I really do.

My sympathies OP. I am the same. Typical tories, soundbites with no substance. Neither myself or my key staff (only 2 of them that I would have actually claimed for) can't get 80% of our salaries paid as I have an ice cream shop and it is seasonal. I would be open by now and my staff would be getting paid (as they always do year on year).
Because they were not actively receiving a salary in 20th February, we are entitled to nothing. I am sickened and feel like I have desperately let my loyal staff down. I have been told by my accountant our only recourse is universal Credit. Sickened.

Can't you just tell us what you sell? It was asked at the start but you may have missed it?

We’re in the same situation owning a limited company, we’ve been trying to access the loans scheme but it’s just not happening, banks aren’t lending the money. They keep saying they’re waiting for the government to release the funding which is rubbish as the government have said they’d act as guarantor for 80% of the amount not that they’d supply the funds. Been told we could get a high interest loan with our house tied in but why should we get ourselves even more into debt and risk our home when everything will most likely fail in the next few weeks anyway.

We’ve furloughed 50% staff but 50% are still working, no one is paying invoices though as they’re ‘closed’ so no cash flow. Next option is to furlough everyone and start asset striping and trying to sell machinery and gear. Worked 15 years to build business, always paid all taxes and seems like in future taxes will be even higher to make up for some people (not us) being helped.

I really think there should have been a scheme that paid everyone an amount per month if they had been working and paying taxes if they needed help.

OP have you heard of ESA? Guessing you and DH have paid NI for the past 2 years... Someone may have mentioned this apols if I'm repeating, got a bit narked with people's unsympathetic and unhelpful tone in regards to your situation!
You should be entitled to this each, it is approx £92 a week which for the pair of you would be £736 a month, do the mortgage break, do you pay business rates? There's a 10k grant for that coming from your local authority in April (apparently they will contact you, but don't hold your breath) also if you rent or anything, pay bills etc, see what is out there and call or email them and explain your situation. My husband has saved £600 this month on doing that, fingers crossed for you.

OP I had to do my own research as DH accountant said he would receive nothing and when I came up with all the info from MSE he said DH may be able to get something - not all accounts are clued up on this!