Director of a LTD company and coronavirus

[Beebers111]

Dh and I run a small business. I don’t draw a salary, he draws just over £12k per year. That’s it. I work elsewhere so have a salary from that.

We don’t qualify for the government help of 80% as far as I know as he isn’t ‘leaving his job’ however we can’t afford to pay him as there isn’t the money in the company.

He isn’t classed as self employed. But we are a lower income family (household income for us is around £25k per year in its entirety).

We already claim a small amount of tax credits which we are entitled to as dd is receiving dla.

I don’t think we are entitled to any help yet? Unless I reduce DH’s salary and claim more tax credits? We have to do something or we are going to be wiped out in about 8 weeks time.

Does anyone have any advice ?

Email your accountant and ask for their advice.

OP, you don’t say whether the lack of work for your husband to do is by reason of the pandemic. If he already didn’t have any work before the country started to shut down, is it fair to claim that he is furloughed because of the virus and hence should have 80% of his salary covered? I’d say not.

Personal tax payments and VAT payments are being deferred. Check in with your accountant as corporate tax may also be deferred.

In the meantime, you should be able to claim 80% of his actual salary back through the government but as pp have said, that assumes there's money in the business to pay it in the meantime.

Is he a paye employee. Earning 12k ? Is that right ? If so, he can claim 80% of the 12k.

He had loads of work lined up and it’s all been cancelled.

I'm confused by this, as about 6 months ago I looked up the rules for sole directors of limited companies, who were on the payroll and required SSP/benefits and it said they were classed as self-employed. I appreciate that 2 of you are directors, so that must be different. If there isn't any money in the company, presumably you can file a zero wage return going forward if you have to? Sounds like you need an accountant's advice, but perhaps wait until after the government briefing today in case they make any announcements that affect you.

You still pay tax on dividends. Lets not start this nonsense.

You get a £2k dividend allowance and then pay 7.5% on anything above this. You may be an employment specialist but others are accountants. It isn’t nonsense, it’s tax arrangements to reduce their personal liability.

Since when did electricians get £12k per annum?? That’s less than cleaners.
Is it part time

OP, ask for a deferment of your CT payment. Also get a HMRC furlough payment of £800 a month which should hopefully get you through.
Director duties are separate to employment. You should still complete returns as required.

@Marpan electricians make £12k per year when it is a brand new business.
We have had to pay for:

Training to update his qualifications
A van
Tools
Equipment

It all adds up.

He was in a different job previously and got made redundant. He was an electrician when he was younger so has gone back to it.

Happy to send you over the accounts. He is paying himself £1000 a month that’s it. Not taking dividends.

You get a £2k dividend allowance and then pay 7.5% on anything above this.

That's only half the picture and completely misleading. I bloody wish

Basic rate 7.5% (but you have already paid 20% corporation tax!!!)
Higher rate 32.5% (but you have already paid 20% corporation tax!!!)
Additional rate 38.1% (as above!).

In most cases there is not much difference in the tax treatment. Most people incorporate so that if anything goes wrong they don't loose their house and put their family security at risk. Anyway. Not the point of the thread.