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?

Hmmm. Don't write off online sales. Everyone is terrified for their income at the moment but when that recedes, the need to be amused, creative or active will return. Humans can't do boredom well.

I do online marketing for a living and even the garden centres are pivoting to seed
box deliveriess and online videos! DM if you want some resources/links.

Good luck, whatever you decide to do.

You say you are paying your staff 80% until the government money comes in. Can you afford to do this?

Do not pay all of this if it will lead to real financial hardship for your family. Have an honest discussion with your employees. Could they cope with 50 or 60% now and the remainder when it comes in?

It isn't a long term solution but could ease life a little at the moment.

There was a Guardian article last week about how many middle-class people are about to get a very nasty shock when they need to claim benefits and how it might change their previous opinions of claimants when they themselves experience the sheer nightmare of it.

Not to detract from the shitty situation OP is in and not saying they personally held this opinion. I just wanted to make the point that this situation will certainly highlight to many thousands of prejudiced people that actually, UC is no fun, it’s certainly not an easy ride and nobody ever wants to be in that situation.

we could not foresee a scenario where we could not trade and would not be insured.

If this is honestly the case, you were very ill advised when setting up your business.

Do NOT take money out of your mortgage to pay staff wages. Keep your personal finances separate from your business finances.

furlough your employees and tell them the business account can't cover it, and you'll apply for the 80% government pledge for them. They'll have to wait until it comes in ... just like you have to wait until your UC helps comes in.

Not unreasonable.

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.

I'm not sure whether you have an accountant OP, but you seem to have been getting some duff advice. As a limited company director you're perfectly entitled to pay more tax if you want to, by taking all your earnings as salary rather than dividends.

OP I'm sorry that some people are being nasty. Absolutely no-one could have predicted this. I have critical illness insurance - as a self employed person as I thought that was the biggest risk to me being able to earn money. Luckily I have some savings to live off, I was saving to pay my tax bill and for a rainy day. But I didn't predict anything like this. This is unprecedented. There are many people in a difficult position.

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

But if you’re only paying yourselves a minimal income and then topping up with dividends you’ve been using tax avoidance (not evasion) to make sure you pay as little tax as possible.

There are ways to work these things so that you’re still sticking to the letter of the law even if not really the spirit. If you’re doing that, I’m sure your accountant has been finding other loopholes to make sure you pay as little as possible too. And I don’t blame you/your accountant. We all do it. It’s just the clever thing to do, to retain as much of your money as possible. As someone who’s been self employed all my life, I know the score.

But now you’re reaping the rewards of the system you’ve been manipulating for years, and experiencing what UC claimants have been saying for years - it’s a nightmare to access, it’s unclear how much you get, you will have to keep reapplying if you’re circumstances change and incur another 5 week wait for it to come back into force, and you have the humiliation of going from a decent income to being “on benefits” with all the cloth cutting that entails.

I’m hoping after this is all over, people might have a little more sympathy with those “on benefits” because as you’ve all now seen, it could be any of us - there but for the grace of god etc

I don’t want to sound unsympathetic and do hope you get something sorted ASAP - I just hope that when this is all over people have a little more respect for those who found themselves in this situation previously, through no fault of their own, be it divorce, job loss, illness etc

@february08baby Karma is a great thing

Thousands of people are dying or suffering financially in a pandemic and you think that's great. You sound smug and unpleasant.

And if you are a public sector worker you will face losing your job or another decade of a pay freeze when we're put back into austerity measures to pay for this. Karma is great, isn't it?

@RUSU92

The OP does not have a Ltd company so
But if you’re only paying yourselves a minimal income and then topping up with dividends you’ve been using tax avoidance (not evasion) to make sure you pay as little tax as possible.
Does not apply. They haven't done this at all.

I’m hoping after this is all over, people might have a little more sympathy with those “on benefits” because as you’ve all now seen, it could be any of us - there but for the grace of god etc

I actually think some of the decisions that have been taken around payments will lead to less support for the welfare state not more. People are not going to be more supportive of a system that provides no back up for them. Some of the attitudes i've seen over the past few days have certainly cemented our decision to move to Denmark, which is obviously not a tax avoidance measure!

Do you really need to pay your employees the 80% wage until the government money comes in? Isn't it being backdated? Surely your workers won't expect you to be destitute to pay them?

I'm not asking you to be mean to your workers, but have you spoke to them honestly?

@greatbighillofhope I am sure, I have been a bit of a dick on here.

I am blurring my anger at the state/our Tory government/policies/ Nhs and welfare cuts/ etc with individual circumstances

I genuinely hope you find a solution and wish you well

I’m hoping after this is all over, people might have a little more sympathy with those “on benefits” because as you’ve all now seen, it could be any of us - there but for the grace of god etc

The pessimist in me thinks this would nice but sadly unlikely.

This is the attitude I think will occur: 'We suffered too, but we managed to pull ourselves up again it wasn't easy blah blah blah.' Forgetting the assets and help they had beforehand.

I also think Nursing will go back to being the position of 'failed doctor', and the NHS continue to be devalued. Some might even use the argument that privatisation would have resulted in better outcomes for those with the virus.

We really need a separate forum section for Covid-19 related business problems because there is staggering level of ignorance, schadenfreude, and sticking the boot in from the general Mumsnet audience.

Bloody hell Mumsnet is a nasty place at the moment. OP, I am really sorry you’re in this situation and I applaud the way you are continuing to pay your staff. I really hope you can find a solution and that your UC is higher than you think.

I'm really sorry, but I have very little sympathy

The pandemic is really bringing out the best in people, isn't it.

RUSU92 read the thread before you comment.
You make the assumption that because I have had a successful business I look down on people on benefits. It’s reverse snobbery.
I have never voted conservative. I do not manipulate the system. We have worked incredibly hard for 26 years to build a successful business and create jobs.
Suddenly, through circumstances no one could ever have predicted or planned for, I have gone from having a comfortable income to having less than no income overnight. My savings are required to fund my obligations with nothing else coming in.
I have insurance for almost all eventualities, but practically no one is covered in the event of a pandemic.
Why is it ok for someone who was once financially secure to have nothing? I don’t believe anyone should have nothing. universal credit is a terrible system. But I am not in government, save your judgement for those that are.
You say “I’m hoping after this is all over, people might have a little more sympathy with those “on benefits”.” I always have had sympathy for them. Why would you have sympathy for certain people but specifically not for people in my circumstances?
Anyone can end up on benefits through no fault of their own. Don’t we all deserve compassion and respect in those circumstances?

OP I'm really sorry to read about your circumstances and I am saddened by those competing to point it out how worse off someone else is than you.

I am waiting for advice from my accountant. I am fortunate in that I do a few different roles in different capacities and am trying not to panic about the drop in income. Do you have any family you could borrow from?

Well said OP. My situation has been nowhere as extreme as yours but it has been overwhelming seeing everything I've worked so hard for all my life suddenly disappear through no fault of my own. I know others are worse off, but it's still a struggle financially and emotionally. I've been in a very low place at moments.

I'm shocked by some of the nasty, bitter posts on here.

I'm not sure if we will claim the 80% as dh is still able to work, and needs to in order to keep clients.
The main income from our business has gone, but long term we need to keep clients.
Apparently, you can't do any work to receive the 80%, so not sure what we'll do.
The amount dh will earn won't cover our bills as it's only a small amount.

Op as far as i can tell you are a traditional partnership? Honestly wait til Monday and try an accountant (if yours doesn't know) for advice - it's is abundantly clear that business structures are an unknown quantity to many Mumsnetters and the knowledgeable input is just mixed up with bitterness at legal tax avoidance, confusion over status etc. It's not going to help you.