Why has Sunak deliberately excluded 3m from COVID support?

[Gecko1978]

The Surveyor said:

RonaldMcDonaldAteMyCat said:

one or two person ltd company with the shareholder directors taking profit via dividends instead of salary. What help have they received?

I may be wrong, but I thought small businesses were eligible for a subsidised loan. So in addition to some tax relief, your one or two person ltd company can apply for a loan to keep the business ticking over and paying a small salary to it's directors.

Genuinely, what other help would you expect to these businesses ?

I kind if agree with this. The what else do you want, comes in if say you were forced inside ir35 then let go. So you closed businessx and paid paye then out of work as the umbrella refuses to furlough you (i know many affected like that). But he is not helping everyone, i think people just wish he was less of a tt about it lol.

[anonymous-user]

anonymous said:

[redacted]

I did no such thing. I pay myself by PAYE.

As for what should these shareholder directors expect? The same level of support as those who are employed or self employed.

It's all very well saying they have access to loans. That's borrowing. Other businesses have been given grants either for general business use or directly to pay employee salaries.

Why should I get access to £2.5k furlough money for my wages, when someone in an identical business who took dividends instead, doesn't?

[TVR1]

RonaldMcDonaldAteMyCat said:

anonymous said:

[redacted]

I did no such thing. I pay myself by PAYE.

As for what should these shareholder directors expect? The same level of support as those who are employed or self employed.

It's all very well saying they have access to loans. That's borrowing. Other businesses have been given grants either for general business use or directly to pay employee salaries.

Why should I get access to £2.5k furlough money for my wages, when someone in an identical business who took dividends instead, doesn't?

I’d prefer to borrow, with a Govmnt underwritten Loan, at no interest for the 1st 12 months and payments only starting after 12 months at a minimal rate of interest and then repayable over 6 years.

You, my furlough friend, are going to see what’s coming.

[anonymous-user]

anonymous said:

[redacted]

They've generated a profit and as business owners have availed themselves of it, as they're entitled, under a government designed taxation regime.

What are you suggesting they've done to deserve less support than an employee on PAYE? Are you viewing this as if every owner manager company is a contractor on the edges of IR35? My business is nothing to do with contracting. Thousands of owner manger businesses like mine are exactly the same.

[The Surveyor]

RonaldMcDonaldAteMyCat said:

...
As for what should these shareholder directors expect? The same level of support as those who are employed or self employed.
...

Supporting the individual directors won't help the failing businesses though. Yes, they'll be able to support themselves but their business will fail and post-covid you'll have 3m unemployed directors who all need needing continued support.

Support their businesses and they'll still be able to support themselves, and post-covid they will also have an active business and the ability to contribute to a recovering economy which (in theory) has the ability to create earnings, pay tax and ultimately repay loans.

[DeejRC]

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

[ITP]

DeejRC said:

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

You are many, many years out of date with 15-20% tax from paid gross ltd company rate. Lots of tax clampdowns happened since then.

[anonymous-user]

The Surveyor said:

Supporting the individual directors won't help the failing businesses though. Yes, they'll be able to support themselves but their business will fail and post-covid you'll have 3m unemployed directors who all need needing continued support.

Support their businesses and they'll still be able to support themselves, and post-covid they will also have an active business and the ability to contribute to a recovering economy which (in theory) has the ability to create earnings, pay tax and ultimately repay loans.

Your two sentences don't make sense.

What are the differences between two identical, shareholder-manager ltd companies (let's say they're a mobile hairdresser, just for sts and giggles);

1. Pay themselves a PAYE salary of £50,000 and don't take dividends; and
2. Pay themselves £10,000 PAYE and £200k in post-tax profit as an annual dividend

Both are entitled to business support in the form of bounceback loans. Let's say both take some of that.

Company number 1 is also entitled to £2500 a month in furlough payments, that it'll never have to repay. 2 is only entitled to £666.

How is that fair or reasonable?

[richardxjr]

DeejRC said:

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

but the self employed have had support in line with the PAYE.

It's purely (small) co directors taking mostly divis and with no commercial premises (which would get rates based grants), who have been overlooked.

[The Surveyor]

RonaldMcDonaldAteMyCat said:

…...
Company number 1 is also entitled to £2500 a month in furlough payments, that it'll never have to repay. 2 is only entitled to £666.

How is that fair or reasonable?

People who earn a different PAYE salary are eligible for a different furlough payment, what is unfair or unreasonable about that?.

[Piersman2]

ITP said:

DeejRC said:

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

You are many, many years out of date with 15-20% tax from paid gross ltd company rate. Lots of tax clampdowns happened since then.

Yep, for the last 10 years I've put aside 30% of my invoiced income to cover the various taxes that will be incurred. Over 10 years it's been a fairly steady ready reckoner with the reserve 'pot' neither particularly growing or diminishing.

[thebraketester]

richardxjr said:

DeejRC said:

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

but the self employed have had support in line with the PAYE.

Unless your taxable income was over 50k then you got nothing.

[steve2]

but the self employed have had support in line with the PAYE.

It's purely (small) co directors taking mostly divis and with no commercial premises (which would get rates based grants), who have been overlooked.


[/quote]

Also us shopkeepers (dividend director) who did get the government grants but which only really covered the rent and the various insurance policy’s we have to have have had no money for wages, and no I am not on mega wages

[DeejRC]

ITP said:

DeejRC said:

Im kinda staggered at all this. To me its very simple:

1. Self employed. Clue is in the title. Nothing more, nothing less. No such thing as support.

2. Tax take for the LTD company thing for a PSC type affair is about 20% overall. You can get it down to about 15% each yr if you want to. Anything below 15% I happen to regard as both morally unfair and a bit bloody stupid as you will set off red flags somewhere.

Im...OK...with handing about 20% over to HMRC. It feels fair enough.

You are many, many years out of date with 15-20% tax from paid gross ltd company rate. Lots of tax clampdowns happened since then.

If you insist. My accountant and the accounts he produces for me say otherwise. I think it’s about 22% this yr to be fair though.

[Stev8s]

I am one of those sole director limited company type not earning a fortune under 50K a year pay my corporation tax and vat had no support at all to be honest not sure what the answer is to all this I will survive but what I don't understand is why the only support is take out a loan or universal credit when others are getting physical money why don't they say to Mr sole trader sorry you will have to take a loan to survive !!
I also think that the way the grants have been issued have been unfair as it all depends on how your premises are rated as I know a lot of companies that have received nothing because of how there premises are rated plus if you are renting office space within a building the grant goes to the owner of the building and not down the line another example I know is a couple of companies within a office building doing exactly the same type of business separated by a door one is limited the other are self employed the limited company not a sausage the others have had over 48K in grants etc how can that be fair.
I started my company 10 years ago at the time my accountant advised to go limited whether it was the right advice or not I don't know I am no accountant or tax advisor I don't understand it all lol all I know is how to repair printers and copiers etc and try and earn a living to pay the mortgage and bills and a week away once a year and maybe the odd weekend I just think it would have been fairer to give everyone a certain amount even £1500 rather than some thousands and others not a bean other than taking a loan
.

[plasticpig]

RonaldMcDonaldAteMyCat said:

I did no such thing. I pay myself by PAYE.

As for what should these shareholder directors expect? The same level of support as those who are employed or self employed.

It's all very well saying they have access to loans. That's borrowing. Other businesses have been given grants either for general business use or directly to pay employee salaries.

Why should I get access to £2.5k furlough money for my wages, when someone in an identical business who took dividends instead, doesn't?

Because one is earned income and one is investment income. You are basically saying they should be treated the same. I am sure HMRC would love to do that for tax purposes. That is what you would end up with if they took investment income into account.

[anonymous-user]

plasticpig said:

Because one is earned income and one is investment income. You are basically saying they should be treated the same. I am sure HMRC would love to do that for tax purposes. That is what you would end up with if they took investment income into account.

For all intents and purposes they are the same in these instances. Please don't tell me you're lumping owner managers of businesses taking divis as income in with Doris and her quarterly BT Divi cheques for 52p or Bigco Pension Income Fund.

[plasticpig]

RonaldMcDonaldAteMyCat said:

For all intents and purposes they are the same in these instances. Please don't tell me you're lumping owner managers of businesses taking divis as income in with Doris and her quarterly BT Divi cheques for 52p or Bigco Pension Income Fund.

You mention two ends of the spectrum. There are non director employee shareholders and also shareholders in family businesses who may derive a large part or all of their income from dividends.

[monkfish1]

Countdown said:

RonaldMcDonaldAteMyCat said:

Self emloyed people have been given grants. Employees have been given furlough money. Don't confuse this 'free' money with loans, that are directly repayable.

Shareholder directors who take minimal salary and pay themselves from the profit they generate have been offered very little.

Haven't there also been other grants, for those with business premises?

Providing they are not rateable premises, yes. But thats a pretty small business.

[hyphen]

Essentially the message to small company directors is is take a Bounce Back Loan, and if business doesn't pick up, shut down the company.

Fully agree that the government abandoning small one man companies is unfortunate.