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.

@StatisticalSense It used to save tax but it doesn’t any more. That’s the point. People have been paying their fair share of tax but are now excluded from support. People often pay themselves dividends because they don’t know how much they are going to earn from one month to another so it’s not possible to pay themselves a fixed salary. It’s also likely to be the case that when these people finally start work again they will find that corporation tax has been increased to pay for the mess we are in, as that’s more palatable to the public than a big income tax rise - as they perceive it to only effect big businesses. May I suggest that you look at the Excluded U.K. Facebook page and read some of the awful stores of people who are struggling or who are no longer with us because they have committed suicide. Excluded U.K. have support from opposition MPs and Keir Starmer has raised the issue in the HOC. I hardly think he would do that if this situation had arisen due to a tax fiddle.

@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 .

Both my family members who get nothing have a partner who is at work. However, you try going from two wages down to one! Neither partner have well paid jobs and the thought of having savings of £16,000 is hilarious.

To say most just shows your absolute ignorance.

@curtaincalll

It's awful, and to top it off, some self employed with no loss of earnings, are entitled to thousands of pounds

No self employed have to prove a serious drop in profits directly due to covid to qualify.

Those excluded are thrown on the universal credit scrap heap if they have no savings to rely on. It's tough for a lot of people.

There does seem to be a misconception that company directors paying themselves in dividends aren’t paying tax.

If people are going to comment, they ought to ensure that they are properly informed.

Profit made by companies is subject to corporation tax. So anything made is taxed there to begin with. If there’s profit left over, dividends can be paid out, it those receiving dividends must declare them on their self assessment tax return - and pay tax and the same rate as everyone else.

I hope that’s educated people.

Also UC don’t pay your mortgage only your rent. Say you are a young family just taken out a large mortgage, not a large house as a 2 bed semi where I live is £250k. You loose one wage, you are well and truly stuffed, UC is not enough to live on, if you rent you will just about survive if you are being very careful.

@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 .

I’ve just read your post again. I can get past why you’ve actually posted on this thread. A comfortable amount? Your comment is utterly thoughtless, you should be ashamed of your ignorance.

*can’t

@Baileysforchristmas

Also UC don’t pay your mortgage only your rent. Say you are a young family just taken out a large mortgage, not a large house as a 2 bed semi where I live is £250k. You loose one wage, you are well and truly stuffed, UC is not enough to live on, if you rent you will just about survive if you are being very careful.

The mortgage holiday was extended for 6 months in November to allow homeowners to pause repayments. It's not ideal but it avoids repossessions due to covid (loss of earnings).

@Coldwinterahead1

Why pay themselves in dividends and not PAYE?

Because they'd have to pay over 25% of the wages in employee AND employer nic. That compares with just 9% NIC for a self employed sole trader. It's been a problem for years but no govt has bothered to solve the inequality. There's also the issue of irregular earnings meaning many people find it hard to pay a regular wage under payroll.

@Babyroobs

No one is excluded from universal credit unless they have capital over 16k.

Or a working partner.

What’s so unfair is that others have access to schemes such as furlough. Leaving a whole section of society with nothing is inexcusable.

@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

Employees on part time low pay got 80% furlough despite not paying NIC, so that argument doesn't wash.

@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 .

Irrelevant. Plenty of people who've had the 80% furlough will have had savings but they weren't excluded.

@ShrikeAttack

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

Many banks aren't participating in the BBL scheme and most of those that are, aren't offering it to new customers, so those customers are excluded too!

But also a limited co can't just pay the BBLloan to the owner/director as it can't be a dividend (not profit) so the director would be hammered by tax and liable to repay the loan back to the company.

@littleone7 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.

Yet when it comes to tax credits and universal credit, the govt regards ltd co directors as self employed, not employees/investors and bases the benefit on company profits, not wages nor dividends. So, basically, they are making up the rules to suit themselves and not being consistent.

I think about you! I’m a keyworker and financially fine but I had a wild argument with my Dad last night over this. Sitting comfy at home, nearly 80, only the TV as a reference, doesn’t really go out anyway but calling for a hard lock down. This would have decimated his business when he was bringing up his family, we’d have lost everything! But now it doesn’t affect him he’s got the cheek to only think about himself. I think it’s a disgrace. People have lost their minds. I’m ashamed of my Country. This is all total Bollox. We should never have locked down but if we did you should have been given the same protection as everyone else.

You can't exclude one set of people for savings and not another.

I have a very healthy savings account well in excess of 16,000. I work freelance PAYE and finished a contract on the 5th of March. Because I was working on the 28th I was able to be re-employed and furloughed. At the maximum amount of 2500. I was furloughed until the end of August, when I then took a new job with a different company. I have been working ever since.

I am probably one of only about 20% of my industry to be so lucky.

28th of February that is.

The decisions were based mainly on saving our economy rather than helping people on an individual level. The furlough scheme was in place to allow job retention. It prevented employers making millions redundant during lockdown and then re- employing new staff when they reopened.

The SEISS scheme is in place to prevent small businesses from going under. Self employment is key to our economy and small businesses have huge positive impact on the economy, they are the backbone in this country.

I'm not making it right but government decisions throughout this have always been about protecting our economy rather than helping individuals.
In terms of human rights or doing the ethical thing, then there is our benefit system so that no one ends up starving on the street.

I'm on SMP (luckily) and my husband who is director of our company has been able to work throughout as was entitled to nothing from the gov / UC despite us having less than £16k personal savings.

People who work for him, on a self employed basis have also worked throughout the pandemic (they all had 1 month off in April but other than that work coming out their ears) and they all been given government top ups to the tune of £10k... it's a joke!

@SmileyClare

The decisions were based mainly on saving our economy rather than helping people on an individual level. The furlough scheme was in place to allow job retention. It prevented employers making millions redundant during lockdown and then re- employing new staff when they reopened.

The SEISS scheme is in place to prevent small businesses from going under. Self employment is key to our economy and small businesses have huge positive impact on the economy, they are the backbone in this country.

I'm not making it right but government decisions throughout this have always been about protecting our economy rather than helping individuals.
In terms of human rights or doing the ethical thing, then there is our benefit system so that no one ends up starving on the street.

The fact that the Conservatives aren’t interested in helping individuals is disgusting. What sort of people are running our country? It’s desperately worrying that we’ve voted these people in and we’re stuck with them for now.

@Sally7645

I'm on SMP (luckily) and my husband who is director of our company has been able to work throughout as was entitled to nothing from the gov / UC despite us having less than £16k personal savings.

People who work for him, on a self employed basis have also worked throughout the pandemic (they all had 1 month off in April but other than that work coming out their ears) and they all been given government top ups to the tune of £10k... it's a joke!

Self employed who claim the SEISS Grant fraudulently despite having work "coming out of their ears" are risking huge HMRC bills and penalties later on. It relies to an extent on self assessment of profits and the small print makes it clear that you could be committing fraud and it will be reviewed.

Is your dh as director advising his work force to claim? They were eligible for the first grant, not the ones after.

@SmileyClare

The decisions were based mainly on saving our economy rather than helping people on an individual level. The furlough scheme was in place to allow job retention. It prevented employers making millions redundant during lockdown and then re- employing new staff when they reopened.

The SEISS scheme is in place to prevent small businesses from going under. Self employment is key to our economy and small businesses have huge positive impact on the economy, they are the backbone in this country.

I'm not making it right but government decisions throughout this have always been about protecting our economy rather than helping individuals.
In terms of human rights or doing the ethical thing, then there is our benefit system so that no one ends up starving on the street.

So why bring in arbitrary rules where some people are supported but others aren't. Rishi's schemes fail miserably on the fairness/parity point. A worker on £51k gets £2500 per month furlough but someone self employed with £51k profit gets nothing. How is that fair and how does it support that person's business?

What about the stupid 50-50 rule? Someone who started self employment in 2018 made 51% of their income for 18/19 from prior employment but then 49% from their new self employment FOR 18/19. Their income was 100% self employment for 19/20 as they stopped their employment a year earlier. They are excluded despite being 100% self employed over a year before covid struck? Why are they excluded when their income was 100% self employed during covid restrictions and the FULL YEAR before?

Another 50:50 stupidity. Even someone who continues to have 50% employment income and 50% self employment. They get no SEISS support and 80% furlough, so now expected to live on just 40% of their previous income. How is that fair when an employee gets 80% furlough?

There are no excuses for Rishi's mistakes and failings with the excluded. It's nonsensical and unfair. Back last March, yes, things had to be done quickly and errors/cracks were understandable, but he's had 10 months to sort it and failed miserably.

@Sertchgi123 The fact that the Conservatives aren’t interested in helping individuals is disgusting. What sort of people are running our country? It’s desperately worrying that we’ve voted these people in and we’re stuck with them for now.

I agree. There is no political party for the small business anymore. Labour are all about unions and public sector. Conservatives are all about big businesses. The self employed and small businesses are now politically homeless. The Tories will find that Rishi's stupidity re the excluded will come back to bite them on the bum at the next election.

I agree, there is little fairness and lots of hard-working people are excluded.

The Tories will always look at the economy as a whole, therefore the system helps the majority and those falling through the cracks have negligible effect on the economy of the nation.

They are effectively thrown on the Universal credit scrap heap. 1.7 million new claims in March 2020 alone. Let's not forget that UC is a woefully low amount offered as a stop gap. After rent and bills, a family is left less than £50 a week to buy food and essentials.

Don't get me wrong, I hate the Tories. People are being failed miserably.