Government packages

[d000hg]

I don't think directors/shareholders should automatically be eligible for some multiplier of dividends because this is clearly far too wide-open for abuse.

But to say the SE can get 80% of their average earning and carry on working, but 1-man or husband/wife who choose to work through a Ltd should get a tiny amount of help and only if they shut their business, seems a bit unfair. It's all well and good saying they are different to a sole trader, but if they go bust we know they are likely going to be personally liable rather than being able to wind up the Ltd and run.
Lots of people run a Ltd purely because it makes things easier - contractors know you cannot easily get hired as a sole-trader for instance. If you want to run some sort of import business from your garage, sellers may well want a company number (I imagine).

I don't think contractors like us should be getting much help but we are somewhat an edge case in the expert-consultancy field.

The problem from my perspective is just how on earth HMRC/Gov can come up with a system that IS reasonable and only catches those who need the help. Base it on SA302 or only those who tick the PSC box on the CT return? Require companies to apply and get each one manually reviewed?

I suppose they could reduce/scrap CT for all companies under some threshold... maybe that might work as a catch-all?

[Paralytic]

I don't think directors/shareholders should automatically be eligible for some multiplier of dividends because this is clearly far too wide-open for abuse.

But to say the SE can get 80% of their average earning and carry on working, but 1-man or husband/wife who choose to work through a Ltd should get a tiny amount of help and only if they shut their business, seems a bit unfair.

Its not choosing to work via a Ltd company that is being excluded here, its the choice to get tax benefits by paying a reduced salary and the rest via dividends.

Some Self Employed will be losing out due to decisions of their own making too - think about all those poor taxi drivers (and other cash-heavy business) that put less than 50% of their turnover through their SA - they might be wishing they had been a little bit more honest.

[d000hg]

There's a world of difference between using the entirely normal system of dividends (which are taxed) and just defrauding HMRC.

A someone starting a business, you take a lot of risk and (often) put in a lot of your own money. Being able to take some income at a beneficial tax rate acknowledges this. It is not swizzling the tax man.

Businesses with premises are getting help, why shouldn't those who don't?

[jamesbrown]

you take a lot of risk

Well, indeed...

I think we're saying the same thing.

The only difference being that I am following this through to the situation we face now.

Businesses with premises are getting help because that is a large fixed cost that is easy to mitigate (and would otherwise push many businesses under). There are other large fixed costs that aren't covered.

Businesses with employees are getting help because employment is something that the government wants to encourage (or, rather, unemployment, discourage).

Directors remunerating themselves and deciding to accept a risk when things are good and transfer a risk when things are bad is not something that the government wants to encourage.

Damn right. You make a choice when paying dividends from profits. It's a payment w/r to profitability. A director can decide to build a warchest too. They have choices unavailable to employees and, if they don't, they have the ultimate choice of becoming an employee and receiving handouts from the state that are intended for employees.

Some people have definitely lost out, unfairly, from the help on offer. That was always inevitable. Directors that have paid themselves in dividends is not one such group, IT contractors or otherwise.

[northernladuk]

but 1-man or husband/wife who choose to work through a Ltd should get a tiny amount of help and only if they shut their business, seems a bit unfair.

I assume you are talking about a situation where both are bringing income in. Not the paid wife who does nothing set up. I think we've touched on it on one thread but I expect we will start having plenty more threads about the wife claiming Covid help as shes an employee. What a piss take that's going to be (in most general cases).

[d000hg]

Well, indeed...

I think we're saying the same thing.

The only difference being that I am following this through to the situation we face now.

Businesses with premises are getting help because that is a large fixed cost that is easy to mitigate (and would otherwise push many businesses under). There are other large fixed costs that aren't covered.

Businesses with employees are getting help because employment is something that the government wants to encourage (or, rather, unemployment, discourage).

Directors remunerating themselves and deciding to accept a risk when things are good and transfer a risk when things are bad is not something that the government wants to encourage.

Damn right. You make a choice when paying dividends from profits. It's a payment w/r to profitability. A director can decide to build a warchest too. They have choices unavailable to employees and, if they don't, they have the ultimate choice of becoming an employee and receiving handouts from the state that are intended for employees.

Some people have definitely lost out, unfairly, from the help on offer. That was always inevitable. Directors that have paid themselves in dividends is not one such group, IT contractors or otherwise.

The free cash for businesses with premises is going to the businesses who don't actually pay business rates.

Most/many 1-man Ltd are not bringing in big bucks to build a warchest from. They're not avoiding loads of tax through dividends. They are basically sole-traders or self-employed people, or maybe a couple of people (mates, spouses) who are using Ltd rather than ST vehicle. That's it.

This is why I ponder SA302 or CT - set at a low level you will weed out all the people like us who shouldn't need help and catch those who do.

That said, you build a warchest to cover a lean period when YOU can't find work easily. Not to cover a world-wide catastrophe where your entire industry is decimated.

In 6 months, lets see how many contractors here are still on the "we shouldn't get any help, we have warchests" page... when most of us are out of work with little prospects of any

[jamesbrown]

The free cash for businesses with premises is going to the businesses who don't actually pay business rates.

Sure, that was the point. Rent is still a comparatively large fixed cost for those businesses. The business rates system was the obvious way to administer that help, because the council has good records. Much of the help is about the mechanism - is it workable, can it be policed?

Most/many 1-man Ltd are not bringing in big bucks to build a warchest from. They're not avoiding loads of tax through dividends. They are basically sole-traders or self-employed people, or maybe a couple of people (mates, spouses) who are using Ltd rather than ST vehicle. That's it.

If they're sole traders, then there is help for them. What are we talking about here? I am talking about directors who are taking the majority of their income as dividends from profit. I agree that help should be available to employees and sole traders. It is. Massive help. There are some gaps, though, which is unfortunate, but inevitable.

That said, you build a warchest to cover a lean period when YOU can't find work easily. Not to cover a world-wide catastrophe where your entire industry is decimated.

Right, but there are situations where your business can go under alongside many other businesses. Like you said, owning a business is a risk. Many businesses will go under. That is life, owning a business. Warchests are for recessions among many other events. It doesn't require a worldwide catastrophe for you to be out of contract for 6-12 months, perhaps longer. After 6-12 months of this, the entire global economy will be in meltdown.

In 6 months, lets see how many contractors here are still on the "we shouldn't get any help, we have warchests" page... when most of us are out of work with little prospects of any

There isn't "no" help. Seemingly, there is help for 80% of PAYE salaries up to 2.5k per month (including for directors). I think that is (more than) reasonable.

[dx4100]

I have work via a umbrella until end of May (started March) and my last gig via my LTD ended in Feb... no hope of work beyond that it seems via either the umbrella or the LTD until this ends...

Reading the rules it would seem I can submit a claim from March onwards via my LTD back dated to March despite the job with the umbrella ? Is that correct?

All gov site says is...

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Not explicit but seems to suggest it’s allowed...

[northernladuk]

Why? . You weren't doing work for the Ltd so you work hasn't stopped for covid.

[dx4100]

Why? . You weren't doing work for the Ltd so you work hasn't stopped for covid.

I get your point, I get the moral issue you are raising but the question stands.

I am not looking to profit from this I am simply looking at my short to long term options on what I can do to protect my position (not lose the house and put food on the table for the family).

I have something of a window where my salary for March, April and May last year was IR35 caught meaning I can claim the full amount. whereas from June drops to way less than NMW.

The scheme is hazy on what is meant by "affected by". like I say come June I was hoping to use LTD for work but that's not going to happen now so it's a question of when and not if. I started at umbrella after Feb 28th so not covered by that - that on the governments side was a low blow.

if I am eligable to claim it would be irresponsible to not to at least consider it