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?

Why was all the fuss made about changes to IR35?

IR35 is a proposal to prevent Employers abusing the system by insisting workers were engaged as self-employed contractors. It was not about the self-employed abusing the system.

Ironically, amongst the large organisations to be most affected by the proposed IR35 charges is the NHS - which contracts a lot of self-employed contractors on terms tantamount to employment but without the obligations and responsibility of an employer.

And the people wittering about IR35 - ironically many disguised employees will do better under this scheme then the genuinely self employed

a) because they can claim the 80% of the PAYE element, no matter how much above 50k they actually take in dividends
b) half of them were probably due to be finishing work due to the IR35 changes at the end of March and now can claim 3 months of 80% earnings

If your son gets dla it will be about 1100 a month min.. not 500

It's not as easy to say 'get a job in a supermarket'

There are 1000s of us all in the same position.

Husband has applied for over 60 jobs since he lost his last week. He hasn't even heard back from one.

OP I'm sorry to hear about this. I would speak directly to your accountant. There will be SOME sort of help out there for you.

I would also say, having made my way UP from benefits, going back down is completely different.

When you're on benefits in the first place, you don't have car loans. You don't have house loans. Lots of expenses that you don't qualify for BECAUSE YOU'RE ON BENEFITS.

Losing 100% of your income overnight doesn't mean your outgoings mysteriously disappear!

Those on benefits normally so to speak don't have that level of outgoings.

There is absolutely no way I could have foreseen that 100% of our income would disappear overnight. No way. I'm insured for broken limbs etc but nothing for some sort of weird world level virus!

Also, when would there ever have been a time when EVERYONE was in the same boat?! Normally my parents would have been able to help out, but they can't as they're in the same position now themselves.

Seriously. Those of you not affected need to wind your necks in and spout your rubbish elsewhere.

That is hard. I was surprised at the set up but I suppose partnerships do have employees. Big accountancy consultancies for example.

The joint profit is strange isn’t it? Will rtft

Thankfully our business is Limited, but if this carries on for more than 8 weeks, we are in serious trouble.

It's all very well saying about the 80% wages etc but our accountant is very cautious about the wording of it as a grant, it will have to be repaid in some way shape or form.

I'm feeling incredibly frustrated and anxious about it all today. I feel for you, OP. We've worked so bloody hard over the last year to keep afloat, amass some savings that will top up our salaries (we take a basic wage) and boom..... it will be gone in the blink of an eye.

If you are self employed and eligible you can work and still claim 80%.

How do you do your tax returns? As individuals?

Sorry for so many others of you in similar situations to me. It sucks.

OP could you sell your products on the Amazon marketplace?

I understand how you are feeling OP. This situation happened to us in the previous recession.
We were also " well off " and had financial commitments according to our income. Nothing that was beyond our means at the time and certainly not borrowing or spending ludicrous sums. And I had even calculated in savings and insurances.

What I hadn't allowed was a sudden NO income whatsoever. A hugely stressful time and has taken YEARS to recover.

But I did find that speaking to my creditors helped. Suspension of house mortgage , business landlords, council rates , any lease holders of equipment, etc.

It is so awful for you both and then to have take your employees into consideration , deal with accounts , etc. must be so difficult.
And nobody should ever underestimate what having a SN child involves as a parent.

I am sorry you and your family are going through this. Hope you can find a way to get over this.

IR35 is a proposal to prevent Employers abusing the system by insisting workers were engaged as self-employed contractors. It was not about the self-employed abusing the system.

Yep absolutely zero SE contractors take advantage of this loophole 🙄

OP - are you in business premises ? If yes then do contact your local authority revenues department who deal with buiness rates. There are grants for businesses registered for Small Business Rates Relief and there are also grants for businesses in retail, hospitality and leisure if the premises has a rateble value of less than £51k. If your local authority has an Economic Development department they can help advise on this too. By local authority, I mean the one to which you pay business rates.

OP if your individual share of the net profit from the partnership is less than £50k you are eligible. The fact your DH is also a partner of the same business and your joint household income is over £50k is neither here nor there. HMRC will be looking at everyone who files self assessment and getting in touch with them to advise how to apply. The fact that you also file a partnership form is not important here - it's your taxable amount that you both submitted on your individual self assessments. That's what the employee furlough scheme is based on and that's what this is based on.

Don't bankrupt yourself paying staff when you can't afford it. Apply for UC ASAP. Check your local council to see if you're eligible for either the £10k or £25k grant. Speak to suppliers. If you can get the grant they may be willing to wait till it comes through - ours are.

Not sure if anyone has suggested this as I haven’t RTFT but if you can’t get through to UC to book your appointment, write a note in your Journal and they ring you within 30 minutes.

Husband got sorted yesterday with a quick phone call.

Hi
There are things you can do to cut costs.
You can ask your council for a stay of council tax, ie will start in June & be added onto next year.
Have you checked with utility companies to make sure you are getting discounts you are entitled to for disability
I slashed my bills by ringing around & cutting down tv etc to smallest package I could.
Little things can help x

OP if your individual share of the net profit from the partnership is less than £50k you are eligible

This is my understanding, it's per person, not partnership.

OP if your individual share of the net profit from the partnership is less than £50k you are eligible

Yes thats what I thought. Your tax returns would show this?

Sorry about the UC. I work for UC and as a high proportion of our staff are disabled (with a fair percentage having to self isolate due to being at risk) we're down most of our staff.

Most of the work on UC is done by case managers on computer or phone and we've been hitting a brick wall trying to ask to work from home so all our staff who are at home can continue working. Some staff self isolating even phoned up begging the manager to be allowed to work from home as they were going stir crazy.

My room were down 60/70 percent of their staff last week including those self isolating due to sickness in the household. And with increased claims it's just hopeless.

Put a note on your journal. No point putting more than one as that doesn't put you any higher on the list. Journals are trigger three, so if your case manager is going in the order they've been told to they'll never get to them, but you might get lucky if your case manager is a rebel.

And just keep trying to get through on the phone.

Your best bet honestly is if you are eligible for any of the business grants they're talking about in the news. So I'd say that should be your top priority.

Look at your outgoings now and cut down your spending as much as you can. Some things you view as essentials others can live without, so you can too with an adjustment in thinking. Get it into your head now that whatever solution you find you're very unlikely to be able to continue with a comfortably off lifestyle. Cut out as much as possible and use an app to track all your family's spending so you can prioritise.

And apply for jobs at all the supermarkets in your local area.

Understandably there is a lot people on here who are clueless about being self employed or have a Limited company. One of the biggest reasons that someone would take a small salary and the rest of their Income in dividends is not simply a tax efficiency but because dividends are paid out of profits. Some months you can take more money and some months you can take nothing. There is nothing stable about self employment.

For the poster who asked about time off for the dentist, or a holiday, it’s really simple, if you don’t work you don’t earn and there is no holiday or sick pay.

I'm really sorry for your situation OP and hope things go OK . I'm similarly affected with an airbnb that I rent out and it's so worrying. However, I still have some income (work in healthcare- frontline), but am having to work extra hours to manage at a time I would rather not be working at all ( late 40's and not in great health previously).

That said - I do agree in some ways that this IS a great leveller. I have spoken to people benefit bashing in the past and tried to explain how things outside their control (severe illness/ accidents/ bereavement) could happen to any one of us at any time and leave us on are arse, yet still some so many believed this could not possibly affect them/ they are well off just due to hard work. Maybe now some will reconsider, though I don't doubt some bigots would say this is 'different' from any other unfortunate events that could occur.

The tax avoidance (and sometimes evasion) targeted by IR35 has been benefitting both employers and employees (calling themselves self employed contractors). It’s right that it’s coming to an end.

@pocketem because it saves them 13% on income tax.

@zsazsajuju It's been deferred until next April now.