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?

I'm sorry for your situation, OP. Do write to your MP about the £50,000 cliff edge. Something has to be done about that as it's not fair.

And for those who keep saying go get a job at a grocery store - those jobs are not nearly as easy to get as you think.

So the response is justified because some people with means like to bash benefit claimants?

Personally, knowing what it’s like to be bashed makes me less inclined to treat others that way, but there we are.

Hope you were able to get an answer today but I would be hopeful that partnership profits would be divided between you and your husband and the £50k threshold would apply to each individual.

@Localocal not normal no. But where I am, they are appealing for workers. You pretty much turn up and get a job

OP, I know exactly how you feel. I don't know much about how you're set up as a partnership, but if you're not in a position to access the CBILS loan then I'd advise you start cutting costs drastically now.

Furlough your staff if you can, or lay them off if you need to. I hate saying that. I know it's the absolute worst feeling in the world, but sometimes you need to look reality in the face and make adjustments to the business to help it survive for the future. Absolutely do not borrow off your own mortgage to pay your staff costs (this exposes you personally, is possibly the most expensive way to do it and it poses an enormous threat to you and your business).

Agree payment holidays with everyone you can. Do anything to liquidate long term stock - sell it on ebay if you can/can you sale-and-return any? Check all your Ts&Cs. Your suppliers might say 'no payment holidays' but ultimately, if you can't pay them, you can't pay them and nobody is going to waste their own time or money taking you to court on it at this time.

If you look into the CBILS scheme, it is really low rates and 12 months deferred payment, including interest and fees covered. I've been advised 8-12 weeks for drawdown, security is only required over £100k or £250k depending on the bank. Nobody is taking first homes as security - it has to be second homes or debentures. Its' really not ideal, but it's the only thing likely to see a lot of us through.

Ignore all the negative comments. Most people don't have a clue about business taxes, finances, or how many of their jobs rely on SMEs. You shouldn't feel bad for having done well for yourself. I really hope you're able to weather the storm and rebuild in the future. It's a very difficult time for all of us.

Try & call again, don't give up, PRAY ABOUT IT & Believe God .
God can make a way even when there seems to be no way

This should give you a full list of support you can access for your business:
www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#gcslocal

OP Check supplier invoices and see if it says they belong to supplier until paid for in full. Tell them come get their goods if you can't pay. Then you don't owe them.

I cannot believe the fkn ignorance and hate on this thread - people who obviously have no idea how business works!

OP is an employer, who has paid salaries and paid taxes, someone who has got off their backside and worked hard!

We are in a similar position DH employs 120 people, as most small businesses do - it isn’t tax avoidance - he pays huge amount of taxes at higher rates than the majority of people on here, he pays himself a small salary, and then dividends. This keeps money in the business and very often, he will forgo the dividend to keep the company going.

Instead of laying people off (like some major companies) he has furloughed, like the op this means some employees, if they have averaged higher earnings over the last few months with overtime, are going to come out with between 85-110% of their salary.

Doing this has been horrendous, hours on the phone, speaking with HR, the banks, it would have been impossible to do much else, like ‘get a job in Tesco’.

Like Op, our priority is the staff, he still has to pay PAYE, which will be around £6,000 that the company has to find, when getting no income whatsoever and everything else is still needing to be paid, all the usual costs of a business, which won’t stop. He also has invoices for other business who’ve provided goods or services to pay.

It’s a bloody nightmare and he won’t be paying himself any time soon. So STFU all you who ‘manage’ on your benefits. Lucky you without the worries and stress everyday, of the responsibility of a business.

OP. Speak to the bank, and ask about all the various grants available to you, rates can be held too and if you think you will start up again, a small emergency loan, as the interest is deferred.
DH is also going to pay himself a small amount of the Div. showing this clearly on the balance sheet, in line with what his employees are getting, his bank says that this will be acceptable to HMRC as long as it isn’t a huge amount.

There are a lot of SME in exactly the same position and I think financial institutions are lobbying. Paying by dividends is the norm for small business.

Best of luck.

Wow. The level of ignorance on this thread is unbelievable! It's like spending ten minutes with my nuts in a vice, browsing that vile HPC site...

For the ignorati among you - and there seem to be many - company profits are taxed at 19%, then any dividends taken out are further taxed at a minimum of 7%, or up to 32.5% if you're a higher rate taxpayer. That - in technical terms that some of you might understand - is "a shitload of tax..."

Lots of people run limited companies for perfectly good practical reasons. We run OUR limited company because most of our clients are ghastly US corporations who would sue the bejasus or of us if we accidentally did something wrong... Or if they were having a bad year, they'd LOOK for something we'd supposedly done wrong, and then try to take our house off us. A limited Co. protects us against the kind of shits who think Trump is a good bloke.

The beans we save on NI are totally wiped out by the extra tax we pay on dividend withdrawal, so A) Please get your facts right, and then B) wind your necks right in.

I'm sorry if this has been posted before, but I can't trawl through every line of this bile to see if it has already.

There's a great petition on Change.org that already has 160k+ signatures and is growing fast. If the rest of you have had the same response as I've just had from my MP (Jeremy Hunt) basically saying 'tough shit,' then this needs sharing and sharing and sharing until HMG pays some attention, to the people who'll actually be providing 47% of the tax take, and most of the jobs, when this shit show is over.

www.change.org/p/uk-parliament-small-ltd-company-directors-to-get-government-support-like-the-employed-and-self-employed?source_location=search_index&algorithm=promoted&original_footer_petition_id=&grid_position=1&pt=AVBldGl0aW9uAGeoQQEAAAAAXoIqvoozNIhlODU2MWYzNA%3D%3D

Cheers and hang in there.

@Jesusisking

Yeah, unless God is going to put some money in OP's account himself I don't think prayer is the answer here.

sparkybrad what you say is not correct, you are not paying more tax by taking some of your income in dividends and if you are then you are being very badly advised. I am a company director painfully by PAYE - if you honestly think that your liability is more than employees on a similar income why are you choosing to be remunerated in this way?

@Kahlua4me

It is not hard to compare the two though. You pay less tax, yes all legal and agreed by HMRC though, these are the important payments. The rest are superfluous to this conversation as have no bearing on the social system per se. If you have no chosen not to allow for sick pay, annual leave, maternity pay etc etc then that is really your call and the consequences of that decision are what you should bear.

You're NOT the same as an employee and shouldn't receive the benefits now as if you are.

Interesting no comments about the profits you've sustained and received. In the ops case over 50k a year! That's substantial.

Imo unless there was an undertaking to pay back the equivalent of ni and income tax at the same rate as employees since the company was established there should be no support offered.

You wouldn't be offering us your profits would you? Why should those who pay the full rates bail you out. It seems yet again that its gain, gain, gain for you.

Many directors, particularly of small Ltd Co’s take a low salary which attracts PAYE and NI and the balance of their income in dividends as when the business needs more cash, the Director doesn’t draw his/her dividend. Many directors of these small LtdCo’s often plough their dividends back into the business to keep it going so they can continue to pay their employees.

I think the government help provided as a result of the coronavirus is incorrect and Directors should also qualify.

@SoloMummy I'm guessing you're employed. What a privileged position to be in. You clearly have absolutely no idea how much hard work it is to run a small business.

I won't be getting paid for the foreseeable yet I'm still working helping people who are in the shit financially and panicking, that's what we do and it's just the way it is. What more do you want me to do? Are you offering to work for free? I sincerely doubt it. Wind your neck in.