What COVID help for sole director of LTD co?
Discussion
As the weeks go on I really feel for people in your position, it seems some people are doing quite well out of the handouts, maybe park talk as we can't go to the pub but heard a few stories of people claiming the 10k business rates grant and then the self employed payment on top. Potentially 17.5k grant for having your business set up in a different way.
i4got said:
I understood that if you were both a director and a PAYE employee of you own ltd company then you could use the Job Retention Scheme (furlough) on the PAYE element. Is this not the case? (Obviously if paying dividends only then not the case)
That's correct, but for most directors the salary is only to the NI limit, and based on last year, so 80% of £719 per month, and only if the director does no work for the company at all outside of statutory responsibilities. If there are business premises and they qualify for business rates relief, the the £10k grant will be available. Other than that, it's bounce back loans.
Contrast this with the SEISS for non incorporated businesses. I had a client call me up on friday, really pleased to have qualified for his, even more pleased to tell me that he'd blown it on an electric bike for himself. It did grate a bit I must admit...
As someone who toyed with the idea of changing my business into a ltd company late last year. At this moment in time am glad I didn’t get round to doing it . As still being a sole trader with my own retail premises I’ve benefited well with no business rates this year + coved -19 business & self employed grant Im around £25k up .think it completely wrong that similar size LTD businesses is not receiving the same government support...
Thanks everyone. I’ve had a look at the bounce back loans. Does anyone know if there is a deadline or cutoff for applying for one of these?
I’m going to try to get by without a loan. If work picks up in the next 2-4 weeks I probably won’t need one but if work doesn’t pick up until autumn I might.
I don’t need one immediately but equally don’t want the offer to have been withdrawn if I do need one in the future.
I’m going to try to get by without a loan. If work picks up in the next 2-4 weeks I probably won’t need one but if work doesn’t pick up until autumn I might.
I don’t need one immediately but equally don’t want the offer to have been withdrawn if I do need one in the future.
Early Nov (4th or 5th I think).
Get the loan. There are no repayments for 12 months and the government cover the interest payments, so if you haven't used it in 12 months you can pay it all back without any cost to yourself (even better if you can invest it and make a little money the capital sum). If you suddenly need it, then you've been proactive and you'll already have the money.
Get the loan. There are no repayments for 12 months and the government cover the interest payments, so if you haven't used it in 12 months you can pay it all back without any cost to yourself (even better if you can invest it and make a little money the capital sum). If you suddenly need it, then you've been proactive and you'll already have the money.
jammy-git said:
Early Nov (4th or 5th I think).
Get the loan. There are no repayments for 12 months and the government cover the interest payments, so if you haven't used it in 12 months you can pay it all back without any cost to yourself (even better if you can invest it and make a little money the capital sum). If you suddenly need it, then you've been proactive and you'll already have the money.
This. There's little downside to getting the money in your account and if you don't use any of it, pay it back without penalty before the repayments start next year.Get the loan. There are no repayments for 12 months and the government cover the interest payments, so if you haven't used it in 12 months you can pay it all back without any cost to yourself (even better if you can invest it and make a little money the capital sum). If you suddenly need it, then you've been proactive and you'll already have the money.
It's unsecured, no directors guarantees required, no credit check, nothing. All things being equal you will never, ever again get such easy access to business finance with such good terms.
Directors can apply the furlough scheme to their salaries IF they satisfy the furlough rules.
That's it as far as grants based on income are concerned.
The problem for directors are -
it's harder for a director to be furloughed compared to an employee
even if they can successfully be furloughed, if they have maximised their dividends and minimised their salaries over the years, the furlough amount, which is based on 80% of their salary levels at 28 February 2020, may not be an awful lot
Dividends are not included in furlough calculations (because dividends are deemed "investment" income, not "earned" income.
That's it as far as grants based on income are concerned.
The problem for directors are -
it's harder for a director to be furloughed compared to an employee
even if they can successfully be furloughed, if they have maximised their dividends and minimised their salaries over the years, the furlough amount, which is based on 80% of their salary levels at 28 February 2020, may not be an awful lot
Dividends are not included in furlough calculations (because dividends are deemed "investment" income, not "earned" income.
Interesting clip on ITV of Martin Lewis (moneysavingexpert.com founder) talking to the head honcho of HMRC who admits that the reason they have done nothing for Directors in this sistuation is that they do not have the ability to check the figures, certainly not in the necessary timescale - they can't necessarily differentiate between the dividends from your own company and those you might have from investments in e.g. British Gas etc. - therefore decided to not offer anything!
of course, it wouldn't be difficult to take one line off the company's annual accounts which specifies dividend payments - and only allow directors to nominate one company etc. - i.e. it would be doable as much as the bounce back loans need almost no verification, but it is the excuse they are using!
of course, it wouldn't be difficult to take one line off the company's annual accounts which specifies dividend payments - and only allow directors to nominate one company etc. - i.e. it would be doable as much as the bounce back loans need almost no verification, but it is the excuse they are using!
Unfortunately, the dividend total shown in a set of company accounts does not give enough information because -
it doesn't show what individuals received the dividends
it doesn't show how dividends were split between individuals
the company's financial accounting year will, in many vases, not be coterminus with the tax year - so you are looking at a different 12 month period.
Dividend information for an individual can only be obtained by looking at an individual's self assessment tax return. However, due to "simplification" attempts over the years, the dividend information shown on a tax return is a simple total figure and does not show a breakdown as to how many dividend payments make up the total nor does it show the source of the dividend amounts - so, as the HMRC man said, they don't have the data.
Ironically, pre 1995 tax returns had all the information regarding dividends that can no longer be obtained from the self assessment system.
it doesn't show what individuals received the dividends
it doesn't show how dividends were split between individuals
the company's financial accounting year will, in many vases, not be coterminus with the tax year - so you are looking at a different 12 month period.
Dividend information for an individual can only be obtained by looking at an individual's self assessment tax return. However, due to "simplification" attempts over the years, the dividend information shown on a tax return is a simple total figure and does not show a breakdown as to how many dividend payments make up the total nor does it show the source of the dividend amounts - so, as the HMRC man said, they don't have the data.
Ironically, pre 1995 tax returns had all the information regarding dividends that can no longer be obtained from the self assessment system.
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