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Support for directors

Looks like we're stuffed

Didn't find your answer?

So, it's looking like no support is offered for one man band notional salary + dividend cases.

That smarts....ah well, you can't have everything 

Replies (22)

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Caroline
By accountantccole
26th Mar 2020 17:28

Wasn’t there going to be clarification on the furloughing bit. I’m hoping it’s in there, although no support for dividends

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Replying to accountantccole:
Lone Wolf
By Lone_Wolf
26th Mar 2020 17:31

Think he mentioned the detailed guidance was being published tonight. Might be wrong.

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Replying to accountantccole:
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By fellowcraft
26th Mar 2020 17:35

I've received FAQ's from an MP

Furloughed workers can do voluntary work so long as it doesnt earn the employer money

Not available for employees started after 1st March

Based on same month 2019 OR ave 12 months earnings

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Locutus of Borg
By Locutus
26th Mar 2020 17:29

@OP That is how I understand it as well.

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By fellowcraft
26th Mar 2020 17:35

Employee? We'll give you 80%

Self Employed? We'll give you 80%

Run a small company? You can lend some money, and if you don't repay it we'll repossess your house

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Replying to fellowcraft:
By Paul D Utherone
26th Mar 2020 17:59

fellowcraft wrote:

Employee? We'll give you 80%

Self Employed? We'll give you 80%

Run a small company? You can lend some money, and if you don't repay it we'll repossess your house

Run a small company, then you're an employee and you / the company will access that way. Of course that may be a problem if you have been reducing liability with the salary/dividend route, but that's surely just another pitfall of operating that way?

EDIT: though maybe a one man band director can't furlough themselves

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By michaelbeaver
26th Mar 2020 17:38

I listened (through gritted teeth) to the whole thing. He mentioned in there that 'there are people who have not contributed [to the treasury] as others have done and this will need to change in the future'. This was the gauntlet thrown down at OMB Ltd businesses.

I think it's sickening that they're using this crisis as a way of getting revenge on what has been legal tax planning for years, when it's too late for them to do anything about it.

And don't get me started on those people who have been forced to work through a limited company by agencies and large corporates.

Tomorrow is going to be painful.

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Replying to michaelbeaver:
By kenny achampong
26th Mar 2020 17:52

I was wondering if that sentence meant that...but why didnt anybody ask the question we all want the answer to ? It's not like BBC/TV journalists dont know about small companies ffs !

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Replying to michaelbeaver:
By Paul D Utherone
26th Mar 2020 17:58

michaelbeaver wrote:

And don't get me started on those people who have been forced to work through a limited company by agencies and large corporates.

Tomorrow is going to be painful.


They could, of course, have drawn it all as salary, but maybe a director of a one man band can't furlough themselves?
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Replying to michaelbeaver:
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By leicsred
26th Mar 2020 20:25

I took it to mean that the self employed ni would rise to the same as employees.

That makes more sense to me as it was said in the context of people getting support who haven't paid in as much. That isn't the case with limited company salary and dividends cases.

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By kenny achampong
26th Mar 2020 17:39

Why can't there be an accountant there who can ask about small companies, why are they all ignoring it ?

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Replying to kenny achampong:
By michaelbeaver
26th Mar 2020 17:40

I'm sure they did ask about it. The chancellor has firmly and very deliberately left them out.

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Replying to michaelbeaver:
By kenny achampong
26th Mar 2020 18:18

Finally found out then. From HMRC "Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes."

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By ireallyshouldknowthisbut
26th Mar 2020 17:53

Fair play quite frankly.

Most of our limited clients will grumble about it, but won't miss £7,500, they will save that by not going on holiday this year.

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Replying to ireallyshouldknowthisbut:
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By Jdopus
26th Mar 2020 19:23

Speak for yourself. I have many clients who operate through a limited company for the legal protections it grants them despite not being large earners who can afford to have no income for the next 3 months.

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By Nemeth
26th Mar 2020 18:16

https://www.gov.uk/government/news/chancellor-gives-support-to-millions-...

'Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.'

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By SWLondonTax
26th Mar 2020 19:49

No support? Are you sure?

1. £575-£800pcm through the Job Retention Scheme
2. A 6 month interest free loan of the Self Assessment payment due in July 2020
3. 12-9 month interest free loan of the VAT due between April to June 2020
4. Delay/Deferring Corporation Tax - not announced but something we have always been able to do. We can adjust a company's reporting period to reduce or delay their future corporation tax liabilities. This will need to be assessed on a case by case basis.

I personally think the above is more then generous considering the tax efficiencies gained over the years.

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Replying to SWLondonTax:
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By gavinbrown1984
26th Mar 2020 19:56

Yes, I quite agree and I am someone that falls within this category.

Although, the contribution of the dividend tax has made the gap closer between self employed and limited company, yet the opportunities available this evening do not represent this.

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Replying to SWLondonTax:
By michaelbeaver
26th Mar 2020 20:01

Since dividend taxes were increased two years ago, most people who work through a Ltd Co bank about £500 to £1000 in savings per year, once extra accounting and admin costs are taken into account. Based on receiving £7,500 from the government over three months, it would take them between 7 and 15 years to see that difference made back in tax and NI savings.

The support you describe isn't cost savings, it is a deferral of cash flow - borrowing, effectively.

Certainly not grants given to keep, such as for sole traders - or indeed, for the employees that they employ.

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By Tanya Bridges-Mann
26th Mar 2020 19:59

I have seen some accountants offering directors to lower their salaries to £131pw to allow 80% reimbursement of £104.80 and for them then to claim ESA of £73.10 a week giving them a higher monthly income of £770.90pm as opposed to 80% of £719pm at £575.20pm

What are peoples thoughts on this? Surely it's manipulating the system and unethical?!

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By leicsred
26th Mar 2020 21:00

The thing I think is most unfair in all this is the £10k grant. The fact of having a small office makes all the difference between £10k and zero.

A simple help would be to simply extend this grant to all limited companies at a lower rate, say the original £3k.

You would have to put in size restrictions etc. Maybe under £100k turnover and only one grant per each major shareholder (eg if you have 2 companies only one grant).

This would help to support all home office companies.

Clearly if this was given we should expect the dividend tax rate to be increased to nearer the 12%.

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Replying to leicsred:
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By fellowcraft
26th Mar 2020 21:09

I totally agree. Why give a £10k grant to a company that pays no rates due to SBRR? Doesn't make sense

My landlord moved me to another unit in the same serviced office 3 months ago. I claimed SBRR on previous room as it was rated seperately. But it turns out this room isn't. So I've lost £10k. Same sized office....same building....

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