Coronavirus support- PSCs

Help for PSCs taking £8,640 + dividend?

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Amongst the announcements of support for employees, and latterly the debate about the self employed, I can see no mention of the PSC taking £719 per month plus dividend?  Or is it simply a case of being furloughed and claiming 80% x £719 = £575 per month?

Replies (20)

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By Cheshire
25th Mar 2020 08:27

Not sure if you have seen the 'Any Answers - most recent responses' section - its worth a look. But essentially no-one knows yet, although I reckon the consensus of opinions posted so far is no, but all we do is wait for the information to come out.

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blue sheep
By NH
25th Mar 2020 08:49

Can we have an automatic reply on these please that says - WE DO NOT HAVE THE DETAILS YET, WE DO NOT KNOW

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Replying to NH:
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By Cheshire
25th Mar 2020 09:23

I do not understand why folk dont do even the most rudimentary of searches on here, but your idea is a good one. Now if only we had mods who could do this!

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Replying to Cheshire:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
25th Mar 2020 09:40

It's a nice idea. We try and keep up with all the conversations here, but we are a very small team struggling to find out the info too and can't stay on top of it all.

Also, you might make that comment at 9:30am and in the current circumstances, new information will emerge at 11am. So if we haven't done so, you could let questioners know there's nothing available yet (if you have the time and the inclination).

If you do want to make such points, there's no need to shout.

In the meantime, if you want to monitor government announcements on business support schemes, this is quite a good page to watch: https://www.businesssupport.gov.uk/coronavirus-business-support/

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Replying to John Stokdyk:
blue sheep
By NH
25th Mar 2020 10:00

John Stokdyk wrote:

If you do want to make such points, there's no need to shout.


Who's shouting? oh yeah it was me, sorry, I need to calm down a bit!
tell you what though - it got your attention John!
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By paul.benny
25th Mar 2020 09:37

If dividends from my shareholdings in UK listed companies are cut as a result of present crisis, do you think I should get a top-up from HMG?

So why should shareholders in PSCs get a top-up from HMG because their dividend falls?

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Replying to paul.benny:
paddle steamer
By DJKL
25th Mar 2020 09:54

You are an optimist using "if", more like when for a fair few companies- certainly at least one of the builders has already suspended a dividend that was to be paid but there will likely be plenty of others.

The way this one has gone I will likely now be working a few extra years to catch up some of the pension damage/delay drawing from my SIPP.

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Replying to paul.benny:
By Duggimon
25th Mar 2020 10:04

Why shouldn't everyone who can't work or earn anything get a top up of their taxable income, regardless of source, up to £2500 a month? Why only people employed via PAYE? Does everyone else have a magic money pile under the bed?

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Replying to Duggimon:
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By ms998
25th Mar 2020 10:15

Self employed are supposedly getting help from the goverment based on last 3 years of earned income up to max of £xx. A bit of rumour mill, but sounds about right.

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Morph
By kevinringer
25th Mar 2020 10:26

There is nothing in the guidance to say directors cannot have it, but it would only apply to PAYE and not dividend. There has been some discussion about zero-hours contracts and what the 80% will be based on. There is an assumption it will be based on an average of recent weeks/months PAYE. Many directors receive their £8640 annually in March so the average for recent weeks/months will be zero.

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Replying to kevinringer:
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By Cheshire
25th Mar 2020 10:35

I would be happy with 80% of my £719 if I got to the stage of having to put myself out to pasture for a while.

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By Accountant A
15th Jun 2020 20:32

-9

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Replying to Accountant A:
RLI
By lionofludesch
25th Mar 2020 13:16

Successive Governments have only themselves to blame.

They've encouraged folk to trade as companies and pay themselves with small salaries and huge dividends.

The Government make the rules. We just follow them. They could jack up dividend tax or charge NI on dividends - or something else. But nothing's been done in the last 30 years beyond introducing a very a modest Dividend Tax, well below the rate of NI.

Not really sympathetic to those now reaping the whirlwind, tbh.

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Replying to Accountant A:
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By rockallj
25th Mar 2020 16:13

[quote=Accountant A]

[For the purposes of government pay outs] "Hope that they realise that dividends are effectively part of your income and not the £800 a month actual salary. "

I look forward to explaining to my clients again, the difference between earnings and investment income.

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By marky74
25th Mar 2020 13:15

I must have had nearly all my one man band limited co's asking this over the last few days..... I wish official guidance would come out soon!
Whats everyone doing about March salaries - waiting until last minute to process them?

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By insolventnl
25th Mar 2020 13:43

I would ask those directors of PSC why they choose this model of low salary and high dividends?
To pay as little tax as possible

Who will be funding these schemes now? The Government - from what? tax money or debt which will be tax money

So do you not think its fair that dividends are not taken into play - you willingly put little into the system, so you get little out of it?

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Replying to insolventnl:
RLI
By lionofludesch
25th Mar 2020 13:53

insolventnl wrote:

I would ask those directors of PSC why they choose this model of low salary and high dividends?
To pay as little tax as possible

Well, that could be a rod for our own backs.

I think a lot of folk would say it's because that's what their accountant recommended.

The New State Pension removed any last bit of incentive to pay more NI than you needed to.

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Replying to insolventnl:
By Duggimon
25th Mar 2020 15:51

You've fallen in to the common trap of supposing that people with limited companies in receipt of both salary and dividends don't pay tax when in fact they still pay quite a lot of tax. In most cases slightly less than they would have paid via PAYE, but still generally quite a lot.

Indeed if you discount National Insurance, which is supposed to specifically pay for things which are very much not the measures under discussion, they often pay more tax than people in PAYE.

If the government is covering people's earnings they should cover everyone's earnings and I expect the only reason they haven't already said they are doing so is because of how enormously complicated it must be to determine what to give self employed people and those operating via PSCs.

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Replying to Duggimon:
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By rockallj
25th Mar 2020 16:32

Duggimon wrote:

You've fallen in to the common trap of supposing that people with limited companies in receipt of both salary and dividends don't pay tax when in fact they still pay quite a lot of tax. In most cases slightly less than they would have paid via PAYE, but still generally quite a lot.

Indeed if you discount National Insurance, which is supposed to specifically pay for things which are very much not the measures under discussion, they often pay more tax than people in PAYE.

If the government is covering people's earnings they should cover everyone's earnings and I expect the only reason they haven't already said they are doing so is because of how enormously complicated it must be to determine what to give self employed people and those operating via PSCs.

Bit of a generalisation, I'd say. By limiting income to PA/PT salary & dividends to utilise the basic rate band fully, director/shareholders still pay less tax & NI. Of course they, otherwise HMRC wouldn't be pushing OPW/IR35 so hard. This is true only of those who pay dividends well into the HR tax bracket.

Some cleverer bod than me with a spreadsheet can tell where what income this is, but I have another call regarding queries on the CJRS 80% grant, limited provision for self-employed and/or Covid-19 SSP/unpaid leave for voluntary self-isolators.

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Replying to Duggimon:
RLI
By lionofludesch
25th Mar 2020 17:36

Duggimon wrote:

Indeed if you discount National Insurance, which is supposed to specifically pay for things which are very much not the measures under discussion, they often pay more tax than people in PAYE.

National Insurance is a tax Duggie. Let's not kid ourselves.

These people save themselves a shed load of money over their careers.

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