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?

NotEverythingIsBlackandwhite, I know how works for partnerships.

I am saying that I don't think the published HMRC guidance is clearly written.

I have also said that I personally think it will be at an individual tax return level.

BUT at this point I am only interpreting the current information, and it won't be my interpretation that matters.

february
I’m sorry that your dh was bullied. But your post is extremely unhelpful to a person, who’s worried they will lose everything.

You are a bit of a weird beast, OP as you fall between the common business denominators. A lot of people pick up the limited status with employees and/or the need to charge VAT.

If you have overheads, look into deferring them or getting a loan from the bank or government. Otherwise, if you will truly get nothing you are better off closing the business and declaring bankruptcy as you simply can't pay for expenses out of thin air. I heard a lot of restaurants and fixed business are doing the same if they can't reach an agreement with their landlords.

Explore all the options.

@greatbighillofhope Are you able to claim the grant if you’re profit was less than £50000 each or is it an overall profit? I’m not self employed but agree it seems unfair that someone can carry on trading and earning but claim the £2500 if their profit was less than £50000 but someone whose if over £50000 and not trading gets nothing. Not sure why that would be as people earning over £50000 PAYE can claim up to £2500 if furloughed. I think it’s a bit unfair to assume that just because people have higher incomes that they will somehow have unlimited savings.

I do feel for you. We are in the same situation, small family run company that we set up 16 years ago with both of us as directors. We haven’t done anything illegal with regards to paying taxes, avoidance etc.

We employ 2 people and take students from the local colleges and schools on work experience several times a year, as well as other apprentices as we work in a niche area of our trade. We also have 2 subbies and always have 1 full time apprentice that we train.

Yes we can furlough the staff but then that means that we cannot do any emergency call outs at all which means letting customers down which won’t do us any good in the future and we have strong relationships with lots of them. DS works for us 1 day a week but I have laid him off as don’t think it’s morally right to furlough him when he’s our son.

So all in all we have gone from working bloody hard, never having time off really as still deal with issues when on holiday, to having no income in the blink of an eye. It’s heart breaking...

permana you clearly don’t understand what it’s like running your own company, employing people and having them depending on you inorder to pay their bills. It’s not up to me to educate you on this. Comments about dental appointments are rather pathetic at this time.

I'm sure the £50k is for each individual not a partnership

Babyroobs thank you. We have two children so hopefully will get more than £500.
We have less than no savings left once we pay outstanding obligations. We will have to take money out of our (fortunately flexible) mortgage to pay staff wages and supplier payments.
We are going through every expense, personal and business was to see what we can cut.
I shouldn’t be but I am embarrassed to say that we did on average earn over £50 each over the last three years. However, we will make very, very little profit this year because of corona. Our industry is non-essential stuff and will not recover quickly or easily. I don’t want to take on a loan that we won’t be able to repay.

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.

If your business gets through this and please get another accountant.

As you are NOT a limited company the profits are split 50/50, so each of you has the £50k limit surely?

I am not at all sure your accountant has this right. I worked for HMRC for 32 years until retired 12 years ago, and came across plenty of accountants who were incompetent or just plain mistaken!

Don’t be embarrassed OP. Be proud. Although you might not get any help . Sounds like the loan and benefits are worth exploring though.

You shouldn't be embarrased at all, BUT it does answer a question and makes the comments some of us are making about it (maybe/probably/we don't know yet) being individual irrelevant for you (although maybe helpful for others).

In terms of your business and current cash flow;

• do you need to pay your suppliers (yes I know that is shit, these are shit times).
• what costs can you cut?
• SORN off road vehicles and reduce insurance accordingly
• reduce business insurance costs (if you have turnover related or cover that won't be covered by COVID 19 then can you reduce that)
• cancel non-essential direct debits, including your VAT (do that now)

These are very generic, you k I'd your business and costs better than anyone.

If we can get those levels of benefits babyroob I think we would be ok.
We would still have to take a massive chunk out of our mortgage and just hope, hope, hope that the business can bounce back from this in the long run otherwise it will mean we will have to let employees go.

OP what do you mean by “taking money out if your mortgage to pay staff wages and suppliers”????

Why are you doing this?

OP according to the info you have provided I'm really confused why you don't have any cash in the business to pay this month's wages and bills. If you made over £50k profit then you must be vat registered therefore have the vat money to use at least.

Im sorry, but, every single person in this country is struggling at the moment. You make it sound as though because you cant live the life youve become a custom to we should all be sorry for you? Yeah the rest of the country gets that £500 a month, thats UC! Or very low amount on top of that. Everyone is using savings to get by, not everyone can get the 80% in the next few months.

As a company you have way more available to you than anyone else here. Im sorry you have had to suck up and use savings to get by etc be thankful you had savings! There is people in this country going homeless, not eating, wortied when they'll be evicted and most probably the people who work for you! Get on to the government, there is PLENTY of help 👌 maybe instead of complaining on here, stay on the phone!

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.

Why all the fuss about changes to IR35 then?

Also plenty of paye employees are only entitled to SSP.

So you each earned over £50k pa averaged over the 3 year qualifying period for the self employed scheme? In that case you're right that you can't claim, but you may be entitled to UC and the other benefits mentioned.

You would both be due to pay tax bills in July - are you able to live off the money put by for that purpose as it doesn't need to be paid until next year? That's what I'm doing, and living off savings.

I'm sorry that this has happened to you. I've had the rug swept from under my feet and it's hard after working so hard for so long.

As a company you have way more available to you than anyone else here.

Thank you everyone.
Vat has just been paid and other taxes can be deferred. Think we will end up getting a tax rebate or paying nothing anyway as profits will be so low this year compared to last.
Will def sorn and stop insurance on one car. Will look into reducing business insurance too.
Have already had lots of preemptive emails From suppliers saying they won’t extend payment terms. We will need to keep them onside to continue supplying us when this is all over.

try using this calculator its more accurate then the online ones like entitled to etc, if you cant get through leave a message on the journal and someone will get in touch with you

www.uceplus.co.uk/how-much-will-my-payment-be.html

say that we did on average earn over £50 each over the last three years.

i'm confused now. So over 50k profit each per year?

OP what do you mean by “taking money out if your mortgage to pay staff wages and suppliers”????

Why are you doing this?

Because they're a partnership, not a limited liability company.

At the end of this, the OP needs some professional advice on restructuring the company to protect themselves from some of the bigger risks involved in running a business and employing people. But now is not the time. Right now they need to focus on speaking to people that can help them get as much support as possible.

Also if you furlough your staff you can claim back some of that money from the gov.

Tax avoidance in this country is legal. Lots of posters saying others don’t understand how business is run etc. We UNDERSTAND, but legal is not ethical. ‘Business‘ will probably be entirely re-thunk after this is all over