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?

THAT message may only have been there a few days. There is ALWAYS endless messages/on hold waiting times when you call for UC/CTC/WTC/PIP. It’s not new or specific to you

I DO think you should be able to claim UC as I am a socialist and hope you. I have never suggested that you are not deserving. What does piss me off though, is people suddenly being horrified at how little they will get/how difficult it is to get it. Offended that they might have to take a job which doesn’t fit with child care (another poster). It’s been like this in the UK for 10 years

Your profits are over £50,000 so you can’t claim. Your salary was small because you took dividends. And 80% of small is smaller. Presumably you set yourselves up this way because of the tax advantage? Why didn’t you make yourselves a limited company?

Most mortgage lenders are offering repayment breaks

We could apply for a loan yes, but lots of banks are asking for extra security (like your home) even though the gvt will underwrite the loan. Don’t know how long it would take to set up and get the money. Certainly not in time for this payday!

it’s more tax efficient. Tax on dividends is less than paying PAYE
Oh. Then surely if you have paid less tax into the system you shouldn't expect the same level of support from the government as PAYE workers

You can apply for a business interruption loan. From MSE;

I'm not eligible for a grant – what other help is available?

Not all self-employed people can access this help – for example, if you earn £50,000 a year or more. If you're not eligible unfortunately you won't be able to claim, but you have other options:

You can apply for a 'business interruption loan'. The temporary Coronavirus Business Interruption Loan Scheme is open to self-employed people and offers access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

The Government could also give you a 'business interruption payment' to cover the first 12 months of interest and fees on the loan.

The scheme is now open for applications, and is offered by all major banks.

You can defer income tax payments. If you have income tax payments due in July 2020 under the self-assessment system, you can defer them until January 2021.

Give apologies OP, I assumed you were a Ltd company so please ignore my posts.

*Huge

People set themselves up as limited companies and take salary and dividends due to tax advantages.
We stuck with self employment as we had no desire to avoid paying taxes which as I say we’ve always been happy to pay.
In our situation we are entitled to nothing at all, if we had been a limited company we might be able to get around £500 self employment grant. I suppose we will just get that £500 from universal credit instead.
Either way, it is not enough to keep our family and our business afloat. We also have pay our employees the 80% until the grants come in.

You will only be eligible for Carers if

your earnings are £123 or less a week after tax, National Insurance and expenses
If your earnings are sometimes more than £123 a week you might still be eligible for Carer’s Allowance. Your average earnings may be calculated to work out if you’re eligible.

Not sure how much a supermarket job might be worth but think carefully before you do it and weigh up all your options.

Oh. Then surely if you have paid less tax into the system you shouldn't expect the same level of support from the government as PAYE workers

I think that is the point of the profit cap @pocketem, which is surprising for the tories. I expect they think those with higher profits will be Ltd?

@greatbighillofhope ‘tax advantage’ IS avoiding paying taxes!!

Anyway, I wish you well. I am sure you will find a solution

Oh. Then surely if you have paid less tax into the system you shouldn't expect the same level of support from the government as PAYE workers

Many of these people will have paid far more tax into the system then PAYE workers, albeit a slightly lower percentage of their earned income.

Are neither of you on the pay roll?
Why can't you apply to get your wages paid?

HMRC GUIDANCE www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

have submitted your Income Tax Self Assessment tax return for the tax year 2018-19traded in the tax year 2019-20are trading when you apply, or would be except for COVID-19intend to continue to trade in the tax year 2020-21have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable incomehaving average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

---

Although it talks about partnership profits I don't think it is clear whether the £50k cap applies to the partnership or your individual position (remembering that you and your spouse are 2 separate individuals).
We need more clarity on this.

Would you be eligible if it is your individual position greatbighillofhope.

I'm not saying one way or the other, I just don't think it's clear yet.

If it is average earnings then I won’t get carers allowance either- fuck.

Do you not have a rainy day fund for you personally?

We could get through quite a few months with no money coming in.

It's always been important to us.

we are a self employed partnership so not employees of a limited company and cannot be furloughed.

Just seen this - sorry.

Sorry that cut & paste didn't format well - the detail is in the link.

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? 

Why indeed....

Carers allowance is deducted pound for pound from UC so there's not really much point claiming it unless you are bothered about the higher class of NI contributions you get by claiming it. If your situation is only temporary then it's probably not worth it. You cannot claim UC if you have savings/ capital above 16k and anything over 6k will reduce it. However if you have a disabled child you will get an extra element for him depending what rate of DLA he receives. Then you can get a carers element on the UC also.

Our accountant is looking into the options but I’m not hopeful. We have been profitable in the past, but we won’t be this year.

Where are you getting £500 Uc from?
Assuming you’ve went through entitledto to check your figures, a couple with no children and no income get roughly that without carers premiums etc.

If you leave a message in your journal that you can’t get through on the phone they might be able to call you back.

Ds gets higher care rate dla if that makes any difference

Do you get business rates relief? If so you may get the £10,000 grant from your local authority

We stuck with self employment as we had no desire to avoid paying taxes

Jones lefty that’s so insulting to many people like myself who have Ltd companies and pay a huge amount of tax.

We pay Corporation tax at 19% on all company profits (which includes dividends)
You pay tax on your dividends which ranges form 7.5% to over 30% (remember the company has already paid 19% corp tax on this).

It’s a shame you didn’t get proper account advice before setting up your business.