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furlough, small dividend in 2020?

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    #11
    It should be made clear - all these measures are there to help those who genuinely need them. Furlough is not a way to get free money or for a company to cut its wage bill except where they genuinely need to due to CV.

    The measures have been rushed through so quickly they are likely wide open to abuse but no accountant should be advising or helping clients to take advantage of them.

    My accountant already told me he's had a rush of clients asking him to retrospectively apply big pay-rises, etc. Use some common sense here. If you have genuine need, claim what you can. If you don't, don't try to find a way to game the system.
    Originally posted by MaryPoppins
    I'd still not breastfeed a nazi
    Originally posted by vetran
    Urine is quite nourishing

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      #12
      Originally posted by d000hg View Post
      It should be made clear - all these measures are there to help those who genuinely need them. Furlough is not a way to get free money or for a company to cut its wage bill except where they genuinely need to due to CV.

      The measures have been rushed through so quickly they are likely wide open to abuse but no accountant should be advising or helping clients to take advantage of them.

      My accountant already told me he's had a rush of clients asking him to retrospectively apply big pay-rises, etc. Use some common sense here. If you have genuine need, claim what you can. If you don't, don't try to find a way to game the system.
      Some might look at this as an opportunity to claw back some of the big losses of the last few years with the war on contractors:
      • Flat rate VAT Scheme
      • Dividend Tax
      • IR35

      If it wasn't for these measures, perhaps contractors might have a more substantial warchest than they currently have.
      Last edited by oliverson; 3 April 2020, 14:21. Reason: additional blank line removed - I'm a stickler for things being right!

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        #13
        By "big losses" you mean "smaller profits". "Big losses" are what companies are facing as they dump staff, face spoiled inventory, bankruptcy. Not having to pay more tax on your profits.

        Again - this is funding for CV-affected businesses. If you aren't affected by CV, you should not be claiming it. Neither should you be seeking to become CV-affected or find a loophole to claim.

        Same would go for a self-employed person who is lucky enough not to be hit by CV, maybe an author or landscape gardener or whatever... the point is not every SE person automatically claims 80% of their normal income but that it's there if their income is impacted.

        Talking about "clawing back" is exactly why contractors have such a bad reputation as greedy tax-dodgers and get no sympathy when we ARE penalised in new taxes.
        Originally posted by MaryPoppins
        I'd still not breastfeed a nazi
        Originally posted by vetran
        Urine is quite nourishing

        Comment


          #14
          Originally posted by Paralytic View Post
          To be clear, have your hours been cut in half, or has your contract been terminated? If you're still doing *any* (non-director duties) work through your Ltd company, you cannot furlough yourself and claim back 80% of salary.

          Is it is just your hours that have been cut, you have to decide whether to terminate the contract with your client before you can furlough yourself. Is the amount you'd now invoice (which you can take as salary and dividends) greater or less than 80% of the salary you'd be able to claim if you furloughed?
          Thank you for your constructive reply.
          They offered to change the contract all of a sudden by reducing hours by half. But I have to agree to that first.
          If I refuse, the company would be idle, and hence why I'm asking about furlough.
          I am asking a genuine question - unlike some of the cases we hear about on the news where they furlough just to save money.

          If I refuse the new agreement, then there is 0 income. But April and May of last year I was paid 500 each. Hence with furlough it'd be 400 for the next 2 months, instead of agreeing to the new sudden contract change that will see it go down to 250.

          I'm not sure if I'm explaining myself clearly...

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            #15
            Originally posted by d000hg View Post
            By "big losses" you mean "smaller profits". "Big losses" are what companies are facing as they dump staff, face spoiled inventory, bankruptcy. Not having to pay more tax on your profits.

            Again - this is funding for CV-affected businesses. If you aren't affected by CV, you should not be claiming it. Neither should you be seeking to become CV-affected or find a loophole to claim.

            Same would go for a self-employed person who is lucky enough not to be hit by CV, maybe an author or landscape gardener or whatever... the point is not every SE person automatically claims 80% of their normal income but that it's there if their income is impacted.

            Talking about "clawing back" is exactly why contractors have such a bad reputation as greedy tax-dodgers and get no sympathy when we ARE penalised in new taxes.
            You don't think the decimation of an entire sector due to IR35 is a 'big loss'? Also, it's all relative. Around £ 3k off the Flat Rate Scheme + £ 7k dividend tax is a big loss to somebody earning maybe £ 150k a year. I say fight fire with fire. If you're entitled to that package of assistance grab it.

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