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?

If you are eligible for the grant I think Rishi Sunak said HMRC would contact you.

Sorry, wrong thread (but relevant all the same)

As a company you have way more available to you than anyone else here.
RTF thread @shanchanx - they're not a limited company.

Ill-informed amateur comments like this from people that don't understand SMEs are not helping.

Do not be forced into a worse position by your suppliers. Of course they don’t want to extend payment terms but it’s tough. They can also get a loan. This credit crunch is exactly what banks are for so let the suppliers use the banks for a loan to tide them over just as you will have to.

It sounds like you have run a really successful business. Ironically, just the sort the government wants to help protect, but it seems your business set up seems to fall between the cracks of the various schemes they have set up. Are you absolutely sure you can't apply for a grant? It is worth leaving no stone unturned just incase there is a way. It is also worth talking to your suppliers about deferring payments and then paying them over a drawn out period to make them more manageable. Even without these unusual circumstances suppliers will have had issues with companies verging on bankruptcy before and many will be more helpful than normal in the current circumstances.

The cash disappears very quickly when you have bought stock based on what we sold this time last year. The stock is sitting there and we cannot sell it. Even before we closed sales were impacted because of the uncertainty c 45% down which means all of what should have been our profit from March is still locked up in stock.
It doesn’t take very long of no sales at all for this sort of business to grind to a halt. Money that was set aside for contingency is now spoken for. Cash flow is very important.

Does your stock have a good shelf life?

Also, can it be sold online?

@greatbighillofhope where are you? (just the county is sufficient) - I can try and connect you with a genuine business advice organisation in your area.

Can you "sell" any stock back to the suppliers or other retailers at a discount?

Fortunately it does have a pretty good shelf life but some stock is seasonal so can’t be sold til next spring.
We do sell online a little bit but our industry is totally non-essential stuff and even online sales have almost entirely dried up.

@greatbighillofhope

You need proper advice from welfare rights. Accountants don't do benefits.

Why are you ringing UC have you made an online claim?

You don't claim carers allowance to get the carers premium on UC there is no point as they take it off penny for penny. You tell them you have caring responsibilities and they add a carer premium to your claim.

With 2 children, one on High rate care DLA you should get around £2000 month but that includes the DLA and Child Benefit.

Universal Credit is approx. £500 for a couple £510 for 2 children £390 disabled child £160 carer if you have no income then nothing will be deducted from this.

Ask for a mortgage holiday. Claim council tax reduction.

Get some proper benefit advice where your personal circumstances can be looked at, no two people are the same.

I know nothing about any of this but just wanted to say people who says - well you can claim £1000 UC per month how is that not enough- are very out of touch.

Me and DH are comfortable and if we both lost out jobs UC wouldn't cover half of our fixed outgoings. Our mortgage alone is 2/3 of this.

Op you have my upmost sympathy and I really hope you can sort something out.

@greatbighillofhope I don't know what business you are in but do you have business interruption insurance?

Our business insurance is underwritten by Amlin and they are looking into claims from our business sector. They are reluctant at the moment to commit to paying out straight away but haven't ruled it out. They like us are dealing with something that is unprecedented, so we are just sitting tight waiting for an outcome.

subjectmatterexpert (but not in tax)

Tax policy is also used to encourage behaviours like starting businesses and creating employment. Which is what OP has done. I’m also a self employed business owner and we pay a very large amount of tax each year and employ 40 people who do the same. Happily.

Anyone who has an ISA or a pension is also a ‘tax avoider’ but they have these options because the government wants to encourage long term saving. It’s how tax policy works.

There are issues with relocating profits offshore by the likes of Amazon but that is not what the OP is doing (you’re not Jeff Bezos are you, OP?). What she is doing is running a business, employing people and paying tax properly. So lay off with the unethical crap please.

I'm really sorry, but I have very little sympathy. You have made over 150k in profits. Let alone the incomes you have received in the last 3 years.
Sorry its hit you hard. But you haven't paid ni or income tax at the rate employees of the same income level will have. Yet you expect to be bailed out.

I suppose now, those luxuries and expenditures are put into context
You have been lucky enough to experience the highs and now sadly like many do in a daily basis you're experiencing the other side. It's unfortunate. But maybe will long term make people appreciate how much better off they truly were and no doubt will be again.

We could, by the way, probably pay slightly less tax if we went back to being a limited company from a partnership. But it’s not worth our while - it’s time consuming to do when we’d rather be growing the business.

It's very tough but we will all have to be frugal and live minimal lifestyles until this is over, people who were well off will be reduced to the level of ordinary poor people
🎻

Are you sure its based on the total partnership earnings and not the self employed earnings as per your individual tax returns?

Sorry to hear you are going through a difficult time op as many are.

Just to be clear though what you said about your family being able to claim nothing isn’t true. You can claim 80% of your staff wages (and you don’t need to pay them the rest). There are also various other schemes you can claim such as VAT payments delay. And then you can personally claim universal credit. So that’s actually quite a lot of money from the taxpayer compared to the average person.

So I don’t think the scheme is “bizarrely unfair” because you cannot claim more as both you and your dh made more than 50,000 in the last three years. On that level of income you should have insurance or savings to fall back on.

Many people are suffering economically and physically in this crisis. Everyone’s situation is hard for them but your situation doesn’t sound like the worst hardship there is in these difficult times.

Can you try to promote your online sales and see if you can up those ?

I'm really sorry, but I have very little sympathy. You have made over 150k in profits. Let alone the incomes you have received in the last 3 years.

someone else to ignore OP, they clearly don't understand what they're talking about.

SoloMummy It is so hard to compare the two though. Yes we may pay less tax, all legal and agreed by HMRC though, but we also pay corporation tax, employers nic and have no sick pay, no annual leave, no maternity pay etc etc.

Yes you can sit and judge others for what you perceive to be an easy life and a scam but the reality is often very different. I think that only really apply to big businesses as they can negotiate their VAT pay rates whereas we wouldn’t have that choice and would be penalised for doing not paying on the dot.

I often think it would be much easier to work for somebody else, go in do my job and go home again. I was a nurse prior to setting this up with dh and that was infinitely easier. Rather than feeling responsible for other people’s salaries, making sure customers have paid, paying suppliers, advertising, planning diaries, doing everything that is needed for a company instead of one section.

Personally we don’t make too much from our business as there is not much difference between what we charge for the work and what we pay our staff. I have always wanted them to feel valued and an important part of our business. They all get a pay rise every single year and we dont tally annual leave as I want them to enjoy life as well as work.

I simply want some help so that our business does not fold and leave people without jobs. Two of them have been with us for 10 years so don’t want to lose them or cause them hardship. Shouldn’t be too much to ask..

Why are people sticking the boot into the OP?

I have jack shit. Spent my some of my pitiful meager funds on some clothes in the online sale yesterday as I literally have nothing decent to wear, everything is a decade old and have literally lost my job so anticipating I will have nothing for months and cannot wear my 6 year old boots all summer again. Spending was actually painful. But I still have sympathy for people 'better off' who have suddenly lost their security.

No useful advice OP but So sorry you and others have lost/are struggling with your businesses

Why was all the fuss made about changes to IR35?