Excluded from financial help

[Sertchgi123]

Over 3 million taxpayers – 10% of the UK workforce, find themselves excluded from financial support, due to Covid restrictions. Two of my family members are affected by this and there's literally nothing on offer.

Rishi Sunak is effectively ignoring and excluding 3 million from any help, yet he bangs on about how he's helping all of us. It makes me sick.

I'm sure there are many others on Mumsnet affected, or know someone who is. What can we do? I've already written to my MP and signed a petition.

I'm excluded from support.
I had a weekend job back in 2018 whilst I built my childminding business. I left the weekend job in March 2019.
I earned £600 more from my weekend job during that tax tear.
So nothing for me.

So the excluded don't deserve parity with those on furlough/claiming the self employed grant?

We are excluded, paying in dividends a what you are advised to do when starting up a ltd company. We pay tax, it hardly saves us anything - but this is what we were advised and now we are left to sink

Dividends are taxed at a lower tax rate and you don't pay national insurance contributions on dividend amounts. This might be why Rishi decided on the policy

It actually makes very little difference for the tax. It used to be very "beneficial", it's changed a lot and works out not much different now (we weren't running back then).

@Justkeepswimming91

Dividends are taxed at a lower tax rate and you don't pay national insurance contributions on dividend amounts. This might be why Rishi decided on the policy

He actually claims it's because they can't establish the source of the dividend, which is odd as they can see it clearly enough when we submit accounts and tax returns for them to give us our tax bills!

My DB is excluded. Lost his U.K. job and his partner visa says “no recourse to public funds” even though he is married to a British woman. He cannot claim universal credit. He can’t even claim carers allowance because his wife is disabled and on ESA/PIP.

Excluded after nearly 2 full years of self employment.
A lot of people have slipped through the cracks.

As far as Im aware everyone (British that is) is eligible for Universal Credit unless you have in excess of £16k in savings.

So most of these people claiming they get nothing are sitting on a comfortable amount .

This isn't about UC credit though, it's about all the Government Schemes that are helping people out. We have friends who were given £50k grants in lockdown 1 yet they didn't stop working all the way through! They told the person who contacted them this, yet they were told "you're entitled to it so take it".

I really wish we did have £16k+ in the bank!

Oh gosh yes, my husband is a Ltd company director as we're never sure what he will earn. He is chronically ill and works when he can. Luckily he had only a few months of down time before getting work again. Who knows what will happen this time round.

There is also another group of people who have been excluded and that's the 2 million claimants of legacy benefits

I have friends who are self employed and got nothing. And I also have friends who are self employed, business was not affected (booming in fact) and still claimed the furlough package.

It felt like it was so rushed and not properly thought through. Sorry to everyone who was negatively affected x

There's also a group of people who, although in theory have been entitled to SEISS, have received next to no support because we started our businesses in the 2016/17 tax year and, like many new businesses, made a loss in our first year. That loss was deducted from the profits we made over the following two years when calculating the grant. My so-called 'support' has been less than £15 per week, and I know someone who was given £4 for 3 months. I've not been able to pay myself a penny since last March, and can't claim UC because I live with my husband. We certainly don't have £16K in the bank - we have no savings at all and it's only by using credit cards that we have coped. Having been a taxpayer for 30 years, and a higher rate one for most of that, it all feels so unfair and unjust.

People can take the grants and continue earning which seems really unfair but the chancellor has already said people should be putting some of that aside for the future. There are very hard times ahead and those who are enjoying the ride now will pay the price later on down the line.
Unfortunately you can't have a perfect system and there will be people who fall through the cracks. It's really scary.

@Coldwinterahead1

Why pay themselves in dividends and not PAYE?

My friend falls in this category, due to seasonal work it's in her interests to not pay a regular salary but to pay as dividend in chunks when the money comes in.

I'm in this category - moved to self employment Oct 18 PAYE so excluded, wish they would stop referring to it as new, its over 2 years. Just had to live off savings this year as SN child but no school place. Tax records going back 30 odd years.

I'm pretty sure you can apply for a bounceback loan and use it to pay yourself in these circumstances.

My DH was self employed in catering/hospitality, and started his own business in 2020, so no tax return due yet so he is excluded. I’m on just above minimum wage so it’s been a horrendous struggle.

My dh and I are excluded. I’ve been self employed for 20 years but that part of my salary is now less than 50% of the total so don’t qualify for SEISS. Rest of salary is from ltd companies that I run with dh, part PAYE part dividends. Mostly dividends as pay ourselves last once we’ve paid employees etc. often don’t get paid every month or even every two months as need to make sure cash flow is ok before we pay ourselves.

Unfortunately if you avoid paying tax by claiming your income in the way of dividends you cannot expect those who paid their fair share to support you especially if you are sitting on savings so I have absolutely no sympathy for that group of people (who are also the loudest moaners).

@Willyoujustbequiet

As far as Im aware everyone (British that is) is eligible for Universal Credit unless you have in excess of £16k in savings.

So most of these people claiming they get nothing are sitting on a comfortable amount .

No, you’re not eligible if you’ve a partner who earns over the threshold either.

So ok, they’ll not have no income, but that’s a couple/family suddenly missing a wage

@Jessi1972 There is also another group of people who have been excluded and that's the 2 million claimants of legacy benefits they weren’t excluded rather some UC claimants benefited because it would have cost too much to only give the £20 a week to working claimants. People in receipt of wtc also get the extra £20 a week. It was meant to help working people on benefits only.

@MoreMorelos

It actually makes very little difference for the tax. It used to be very "beneficial", it's changed a lot and works out not much different now (we weren't running back then).

I think the biggest misconception is that 'directors' receive dividends. In actual fact, you receive dividends as a shareholder of the company, not a director. This is why it is not covered under the government schemes.

@AldiAisleofCrap

Actually it was deemed and declared at the time that the computer system running legacy benefits wasn't able to be updated quickly enough to give the increase.
Please read the following letter

www.gov.uk/government/publications/covid-19-letter-to-secretary-of-state-from-ssac/covid-19-ssac-letter-to-the-secretary-of-state