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Owner director a small limited company confused

1 reply

Calmandsteady · 29/03/2020 13:17

Hi I am the owner / director or a small limited catering business. Obviously I am unable to work as I cater for parties and events and all of these have cancelled for the foreseeable future as no gatherings allowed. Any staff I employ for events are freelance and work elsewhere too. They invoice me for work done and then they look after their own tax arrangements, they all seem to be ok. My overheads are storage unit, insurances (public liability etc), phone and pension, rental of kitchen is by the day so that's ok thankfully. I currently run through a payroll £750 per month for me then draw dividends that vary each month dependent on business levels and profitability. I am confused because I am not really an employee so not entitled to 80% salary I don't think but equally I'm not self employed as my company is limited. Obviously I pay tax and corporation tax and VAT every quarter. I have stopped the direct debit for VAT as understand this can be deferred at the moment but ultimately will need paying. I cannot survive on £600 per month long term if this goes on for any months (can I even claim this?) especially as group gatherings will be one of the last things to be reintroduced.i think, this £600 if I can claim it will just about cover the Direct Debits for the business that I need too keep on as they are on contracts. MY DH works so not in dire straights and understand that there are lots of people out there with much more serious concerns but just wonder if there is anyone that can offer advice on which category I fall into. I thinking of applying for a supermarket job but n to sure if this is a bad idea in the long run for what I can claim for my business. I'm volunteering for NHS so keeping busy and have children at home but just unclear on what category I fall into Thanks

OP posts:
flowery · 29/03/2020 13:49

If you pay yourself through a PAYE scheme you are an employee, so your company can furlough you and reclaim 80% of your salary. You’d need to do no work at all (other than statutory duties like filing annual returns etc). Obviously you won’t get anything in respect of dividends you might have earned as a shareholder, but if you need to close your business for a time, furloughing will get you something.

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