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?

Pickpick it's also true that many people re-invest in their business and many businesses can be asset rich but cash poor so have no savings.

Shit time to sell a tractor or machinery or vans etc though 🤷‍♀️ I can see that scenario hitting a lot of (on paper) higher earners tbf.

Listen to @subjectmatterexpert If you run a Ltd company you are technically employed by your own company. This means you can furlough yourselves & claim 80% of your salary. As long as you obviously paid yourselves a salary of course...

Also, everyone else ISNT on 80%! Many many companies don’t know how to access this. MPs don’t know how to advise companies to access it. I know many people at home with nothing, trying to get a UC application in. It’s an unprecedented disaster. So don’t think you will get through to some one on the phone who can fix this for you

Subjectmatterexpert, we are a self employed partnership so not employees of a limited company and cannot be furloughed.
Even if our company was limited, almost all Ltd co only pay themselves as employees a very small wage. Instead they take their profit as dividends at the end of the year. All of those people are basically screwed, like we are.

I am so angry for your OP. They have indeed completely let down people in your situation and it makes no sense at all. I understand not wanting to offer support to those on high income, but why a cap of £2,500 for high income on PAYE but not business owners?

I am not in your situation and don't know anyone who is, but I feel devasted for people like you OP. This has to be one of the most unfair and unreasonable political decision. All we can hope for is someone waking up in governement and decide to change that rule.

God OP I am so sorry. I don’t know enough to give you advice but I am so sympathetic. I think the suggestion that you speak to professional advisers is a good one.

I dont understand

If you have no income and cant claim the 80% you will get universal credit. With the child alllowances and carers/disabled allowance you will get over £1000 per month.

Is that not enough? Did you vote tory?

I’m really sorry OP, we’re three days into the UC application farce. And you are right we’re not all struggling, there are an awful lot of us getting nothing but expected to be cheerful about it.

I don’t think it’s correct to say “you can’t claim if the company makes over 50k profit. I understood it was if your personal income* was over 50k.

Plus if you have ltd company you should have been taking a small salary plus dividends. You and your DH can claim the 80% of your salary.
You need to ask your accountant again if you’ve been taking a salary.

To add, even Martin Lewis has been confused by situations like yours. He got clarification last night from the treasury. So do look at his advice.

We are self employed and have employees, that is a thing!
We have furloughed all our staff. Covering the 80% of their wages in the meantime before the gvt gets the grant scheme organised is a real problem for us. We will have to go without in order to fund their wages in the hope that we can manage until the employee grants kick in.
It’s not a great feeling to be having to find that when we know we won’t get the same for ourselves.

Worse thing about ringing up for UC is that you have to listen to a long recorded message every time that tells you that if you are calling about self employed support scheme to hang up. I have to stay on the line every time, fells like I’m having salt rubbed in the wound when I’ve heard it over 50 times now and still not got through.

Yes, this is as it has been for UC claimants for many years

In which case I take what I said back, it must be incredibly tough. I would certainly get some professional advice but otherwise my sympathies go out to you & your family.

willyoujustbequiet, Might we get £1000 a month? When I used an online calculator it says c £500. Could we possibly get that each? That would be amazing.
I have never voted Tory in my life!

So sorry to hear all this. You need to stop concentrating on the business and get a job as quickly as you can.

I completely understand why you are focussed on the business but really, if you or your husband can get a job in a supermarket, do it. You cannot have two of you not bringing in money. You need income.

almost all Ltd co only pay themselves as employees a very small wage. Instead they take their profit as dividends

Why do they do that?

Subjectmatterexpert, the message about self employed grant can only have been on there since self employed grant was invented a few days ago.
What is it about my situation that makes you think I am not deserving of UC or somehow self indulgent to be disappointed that I am not being given the same support as other self employed people who are much better off than myself.
I am incredibly grateful for the welfare state and have happily and proudly paid all my taxes for many years to support those in need. I am in need now and am grateful for the hope that we might get universal support.

@pocketem - it’s more tax efficient. Tax on dividends is less than paying PAYE.

I probably will get a supermarket job if this goes on much longer, I have been looking at the options. Until Thursday I thought we would be getting 80%like employees as this is what the gvt were saying.
Getting a job in a supermarket means we might not be eligible for UC (?) also means that the business is left to flounder and we could have no business to come back to when this is all over. That would mean all my employees losing their jobs too. It’s not a simple choice.

It is slightly more tax efficient than PAYE, BUT we don’t get sick pay/ holiday pay etc

Why do they do that?

It reduces tax liability, although apparently there are some other reasons too. Usually they're paying themselves about 8.5k per annum salary, just below the NI Class 1 contributions threshold. A person in that position could still potentially claim 80% of that salary though which would be about £550 per month. Seems OP and DH not eligible though.

Can you apply for the business loan? Would that help you to pay your employees until the govt money comes through.

I don't think it's at all clear whether the £50k is based on total partnership profits or your individual share.

I've just tried to find some clarification on this but haven't been able to.

If it is your individual share as per your self assessment return would you be eligible?

Seems OP and DH not eligible though.

They may well be, I think the OP has been badly advised by their accountant.

Before you panic you need to speak to someone that understands what's on offer and can take a look at the specifics of your business. You need to speak to:

• your accountant
• your local chamber of commerce
• your bank manager

There are also a lot of local/regional business consultants offering free support at the moment (unlike the Big Name city consultants most will be self-employed themselves and in a similar position).

There are several hints of details in what you've said that give me hope that there's a way out of this for you, but it will need someone to look at the details of your business and how you've structured your personal accounts and relationship to the business.

Also, look at your overheads. What can be put on hold? Who are you paying them to who would be better off having you come out the other end of this as a functioning business than seeing you go under? Your landlord is a classic example, better for them to forego some rent than to have to find a new tenant later in the year.

UC is a family benefit so no you wouldn't get that much each
You might be able to get some towards your mortgage interest and you'd get more than £500 to live off (as a family, not each)