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?

The £500 was on a different calculator site. Entitledto kept crashing.

Honestly

@greatbighillofhope
How much are you each declaring as a distribution on your self-assessment returns? (and how are you declaring it?)

• you've said you're not employed and furlough doesn't count
• you've said your a partnership not a limited company so dividends don't enter in to it
• as there are two of you I'd assume you're each taking an income to get two tax annual allowances

Have you looked into the rates relief and the grants available to businesses that qualify for SBRR?

You need to speak to a professional business adviser - turning to social media for help is only going to end in a spiral of despair, as it's becoming very clear on all social media channels that the general public has no more concept of small business and self-employment as they do the mating habits of platypus.

Random18 our rainy day fund is already spoken for by having to fund all overheads whilst not trading. As I said in my first post, we could not foresee a scenario where we could not trade and would not be insured.
Fortunately we have very little debt, just our cars to pay for and a bit on the credit card. We have always loved well within our means. Many people in our financial situation would have extended themselves so much life than we have done.

reading the government website, it should be looking at each of your own self assessment returns from the self employed partnership - so it is the figures you put on your own tax return. the criteria of then being over half your income then applies.

so I would read it as if the total partnership income is less than an average of £100k, and it is split equally 50/50, then you should be eligible. need to check with your accountant.

these grants are based on the individual persons income, not household/partnership I think

I assume that you know about not paying your payment on account in July, plus the deferred VAT too?

Can you contact your landlord/mortgage provider to ask for a payment holiday?

Can you get a holiday from business expenses too? Rent, utility payments, etc

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.
Oh dear. I think you've been badly misinformed and you don't understand the benefits of a limited liability company - as soon as you start employing people the least of the benefits is the potential tax advantages.

We operate via a limited company, taking dividends. We pay a huge amount of tax every year. It’s not a tax avoidance tactic, people should educate themselves.

To be fair your accountant won't know yet (unless they have a direct line to the government policy depn on this).

I really think it is going to be individual, BUT I don't know either.

We need clarification and it will come.

OP - are you a formal partnership ie. do you submit a partnership tax return as well as individual SA tax returns? If so your partnership tax returns would show company profit and this would the be split two ways for each individual tax return.

Sorry, I take back what I said about Ltd co. That was an emotional reaction based on the fact that some people seem to think I’m some sort of tax dodging Tory voter.

Oops cross posted with wufti

If you're self employed then you will both have been submitting tax returns and will be entitled for the self employment package providing you each earn less than 50k profit?

It feels like there is a piece of the jigsaw missing here. I would seek advice from another accountant.

Maybe we have been badly advised. We have been employing people for years while remaining a partnership. Accountant reviewed options many times over the years and said no reason to change.

Universal credit : what you will get.
£498.00 couples element - assuming you are over 25.
£277.00 child element assuming your son was born before April 2017.
£160.00 Carers element
£383.86 disabled child higher element.
Total = Approx £1318.86 per month.
If you have savings over 6k then each £250 above 6k will reduce the amount of UC by £4.35.
If you have savings over 16k you cannot claim.

I don’t think there’s any reason to think the £50k won’t be individual. Or did you each earn more than £50k?

Lots of councils have diverted their small business support teams to offer advice and support with the government loans etc. I’d contact yours on Monday, they will know more than your accountant.

I’ve only skim read but have you asked landlord on any premises you rent for a rent reduction? That’s happening a lot for commercial landlords right now.

I’m sorry you are falling between the cracks here but you should get better advice. I would assume you are each self employed and so you share the £50k business profits between you bringing you under the threshold (that’s how it would work on your tax return I think). I’ve no idea but the schemes are still being fleshed out so you may find there’s some hope.

Good luck and all the stupid people saying ‘did you vote Tory’ on this thread should have a word with themselves. They’ve got employees - think about the number of families they are supporting. And trying to protect by paying salaries until the furlough cash comes through, when they have nothing coming in themselves. Ugh with the tribalism

Then also child benefit and DLA paid separately on top of the £1318 UC. If you have more than one child the Uc amount will be an extra £231 for each additional child. Also the Uc amount is going up more soon ( standard couples element) will go up another £83 a month.

Would you be comfortable saying which county you're in @greatbighillofhope ? - so we can have a look and see who you could be talking to about this other than your accountant (who is probably a very good accountant, but may not be the best person to advise you on business structure and planning).

and this is why DH never took his self employed business full time and kept his main (key worker) job during the week.

He got criticised by his full time competitors, customers were told he wasn't professional, he really struggled to get established as a result. But now he's won awards and gets lots of business.

He might not be entitled to any help as his business is not full time but as least he still has his main employment. We will lose money but we will survive. I also have a full time public sector job so I'm okay.

Those who effectively bullied him, threatened us and put us through hell as he tried to establish his second income are now fucked. Many of them did not declare all their income. Karma is a great thing.

Sympathies to you and your DH but then again everyone knows self employment is less stable than working for an employer.

So @LizzieSiddal if you have a dentist appointment etc in work hours you dock your dividend?
I doubt it.
I know lots of business owners who have lots of holidays and take time off if they are sick, I doubt they refund the business when they do this!

@Chasingsquirrels

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.
It might help you to think about a scenario where there were, say, 15 partners in a partnership. (I know that's an unrealistic number if partners for that profit level but it will hopefully help you answer your own question).

Each of those partners is entitled to a share of the profits based on their partnership agreement. Therefore, you wouldn't expect them all to lose out as the company's average profit is £50k, you would expect it to be based on your individual share of that profit.

DogInATent that's diplomatic (to say the least).

Op - you will have nearly over £1800 a month of benefits coming in. I understand that will be a drop perhaps from what you are used to earning but more than enough to get by for a few months.

Haven't read the thread so this may have been mentioned already - caller on LBC last night was advised to look at the government's business interruption loan. Would this help your situation?

www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/