[Misc] How long can You go on?

[DJ NOBO]

Was he an employee, self employed or did he operate through a one man band limited company?

I think one man band, defo not an employee. I know for definite he is allowed to claim furlough and carry on working where he can, because he told me.
I would check with him but he’s got the hump with me after I suggested he donate a portion of his top-up earnings to the NHS. He wasn’t up for that!

 

[LlcoolJ]

Isn't the more recent clarification that directors can claim furloughed wages (albeit normally on the nominal pay of c. £8,700 p.a.) if they are now only carrying out statutory duties?
.

Correct. But as we discussed, 80% of £8700 could be less than UC and the associated benefits.

Plus you can already claim it.

I didn't actually say that you couldn't claim the 80% btw. The opposite.

Just that it's not clear which is the best route to take. And (banging the same drum) every case is different.

You know all this stuff anyway.....

 

[Weststander]

I think one man band, defo not an employee. I know for definite he is allowed to claim furlough and carry on working where he can, because he told me.
I would check with him but he’s got the hump with me after I suggested he donate a portion of his top-up earnings to the NHS. He wasn’t up for that!

I totally believed your story.

I’d be interested to know whether he’s self employed or running a limited company, so I can comment on significant income and tax implications of his bountiful situation.

 

[DJ NOBO]

I totally believed your story.

I’d be interested to know whether he’s self employed or running a limited company, so I can comment on significant income and tax implications of his bountiful situation.

Just had a nose. He’s on companies house, so I’m guessing that means limited company

 

[Weststander]

Correct. But as we discussed, 80% of £8700 could be less than UC and the associated benefits.

Plus you can already claim it.

I didn't actually say that you couldn't claim the 80% btw. The opposite.

Just that it's not clear which is the best route to take. And (banging the same drum) every case is different.

You know all this stuff anyway.....

I wasn’t questioning your advice, you know more than me, I think you’re actively helping clients through the minefield of all the moves that can be made.

 

[LlcoolJ]

I fully expect tax on self employed to rise to 23 \24% next year Whether you claim or not . I'm still getting work ,but trying to be 100% safe can be difficult . I don't want to claim ,but for safety's sake i may just have too.

I don't expect that. It would be economic madness to bump up taxes when the economy is trying to recover from a huge drop.

Especially when loads of small businesses will have gone to the wall and loads of new ones will be attempting to start up.

It's possible obviously as the government often likes to commit suicide economically...... but I think the mess will be so big that they will have to listen to those experts that Gove doesn't like.

In for a penny (or a few hundred billion) what will be needed is a massive stimulus deal. Not higher taxes (short term).

More sensibly, governments worldwide should finally realise that they have to work together to stop the billions in unpaid tax through offshore/zero tax haven chicanery. That's where all the money is.

I'll not hold my breath on that one though.

 

[Weststander]

Just had a nose. He’s on companies house, so I’m guessing that means limited company

Right, if his company now has zero custom, he can probably furlough his nominal salary. At say £832 a month, in effect HMRC will be subsidising that in the sum of £666 per month. If his company has current business, he can’t and imho will be caught out either when claiming or more likely down the line,

With the other jobs he’s taken on and rolling in cash, he almost certainly won’t get UC.

So imho the most he will gain by is £666 per month.

 

[Leekbrookgull]

The extent of this furloughing will be pretty much dependent upon how much is left in the Govt piggy bank.

Actually you maybe closer to the truth than you think you are.

 

[Yoda]

No time limit being in the NHS for money worries. Could've been if this had struck sooner as my misses was made redundant at the end of January (but placed on gardening leave at the end of November so she could look for a new job), but was lucky enough to find and then start a new job at a care home in February. They are even paying a little extra for staff that are well enough to cover their shifts during this crisis and feeding them on their breaks too.

The only trouble I have trying to keep sane as I'm now work from home in my IT role, rather than on site. Limited amount of us in the field.

 

[DJ NOBO]

Right, if his company now has zero custom, he can probably furlough his nominal salary. At say £832 a month, in effect HMRC will be subsidising that in the sum of £666 per month. If his company has curreng business, he can’t and imho will be caught out either when claiming or more likely down the line,

With the other jobs he’s taken on and rolling in cash, he almost certainly won’t get UC.

So imho the most he will gain by is £666 per month.

I thought he was entitled to claim the £2500(?)pcm furlough , and whatever he earned on top of that ?
Which seems outrageously generous, especially given the plight of some on this thread.
You don’t think that’s the case ?

 

[drew]

The extent of this furloughing will be pretty much dependent upon how much is left in the Govt piggy bank.

There isn't a fixed amount in the piggy bank though.

 

[LlcoolJ]

About time we had an early evening round of applause for all the supermarket people. Great work in keeping us fed and having to put up with their share of abuse.

This.

 

[LlcoolJ]

I thought he was entitled to claim the £2500(?)pcm furlough , and whatever he earned on top of that ?
Which seems outrageously generous, especially given the plight of some on this thread.
You don’t think that’s the case ?

It's not a question of "think". It's not the case.

Have a watch of that FT video I posted earlier in the thread as it explains it all.

As an aside, one of the most annoying things for accountants is the "my mate said...." conversation.

[emoji23]

 

[Raleigh Chopper]

If you are on a standard director's salary and take dividends then the advice (provided you aren't working) is to get a UC claim in asap.

The difference in money from the company claiming the 80% is minimal but importantly, the mechanism is already in place to claim.

Also, UC means the possibility of claiming council tax benefit and housing allowance. So could actually mean more money to survive with.

Unfortunately if you have more than £16k in savings you can't claim. In which case attempting to claim the 80% salary compensation will be the correct route. Again though, nobody knows exactly how this will work until the procedure is live.

I would speak to your accountant and find out which route is best for you asap.

Thanks again, very useful, I am going to sort it all out tomorrow with my accountant.

 

[beorhthelm]

It's an old quote but many many people don't have £1,000 in savings if their hot water tank or boiler goes tits up. So, the government has no money and many of the population don't have the money, how did we get to be the 5th biggest economy in the World ? and, where is the money ?

the size of the economy is created by people, working, trading, providing services, getting paid then spending, consuming goods and services, and pay taxes. this cycling of money grows the economy adding value (hopefully) at each stage. people do have money, even if a proportion do not have savings. the govenment borrows from those that do have savings to spend between now and when taxes come in to cover.

 

[LlcoolJ]

Thanks again, very useful, I am going to sort it all out tomorrow with my accountant.

No problem and best of luck.

 

[Weststander]

I thought he was entitled to claim the £2500(?)pcm furlough , and whatever he earned on top of that ?
Which seems outrageously generous, especially given the plight of some on this thread.
You don’t think that’s the case ?

He could, but almost everyone and anyone running a family or one man band limited company, only pays themselves a nominal salary eg now £832 a month. [A touchy tax subject on NSC btw, let’s not go there]. The rest is drawn out in dividends.

He can’t now suddenly pay himself a higher salary to milk the scheme, as it’s based on old pay, data which HMRC mandatorily received in real time monthly.

He can’t get covid19 financial assistance for the lost dividends, especially if he’s doing rather nicely from his new found other income.

I hope that assuages your initial feelings on the bloke being a financial winner from the crisis.

 

[Raleigh Chopper]

Right, if his company now has zero custom, he can probably furlough his nominal salary. At say £832 a month, in effect HMRC will be subsidising that in the sum of £666 per month. If his company has current business, he can’t and imho will be caught out either when claiming or more likely down the line,

With the other jobs he’s taken on and rolling in cash, he almost certainly won’t get UC.

So imho the most he will gain by is £666 per month.

I'm self employed and I'm not trying to be holier than thou but I hope that people who are still working and earning as much as before are caught if they claim.
I would have thought that they know about this as it's clear that many builders etc are still working.
Once this is over I think Rishi will come down very hard on us, to be honest, although I'm totally legit and legal it's amazing what you can get away with even after taking into consideration no holiday/sick pay, redundancy, pension etc etc.
I think he may stop all cash payments
He made signals that he was going to do it saying "but that is for another day"

 

[Uncle Spielberg]

It looks like this month I will have my first ever £ 0 income since starting work in February 1979. We all agree with the lockdown but as Peston pointed out today the government need to give a crumb of hope as to a timeframe and the plan like most others have but they refuse to do so and for now we seem to be on the naughty step with no end date. I know we are in the upward stage but some explanation of the next stage if goes to plan seems a reasonable thing to ask. Lenders are saying today they cannot do another 3 month payment holiday. The lockdown cannot carry on for 6 months as if it was there will simply be nothing left and no economy to come back to so there will be a tipping point at some stage

 

[Weststander]

I'm self employed and I'm not trying to be holier than thou but I hope that people who are still working and earning as much as before are caught if they claim.
I would have thought that they know about this as it's clear that many builders etc are still working.
Once this is over I think Rishi will come down very hard on us, to be honest, although I'm totally legit and legal it's amazing what you can get away with even after taking into consideration no holiday/sick pay, redundancy, pension etc etc.
I think he may stop all cash payments
He made signals that he was going to do it saying "but that is for another day"

Self employed are in a better position.

You can carry on working AND claim the financial assistance if average annual taxable profits were not greater than £50k 6/4/16 to 5/4/19. A generous scheme.

One word of warning, I think the payouts will ultimately be taxable through your later tax returns, @LL Cool J will correct me if I’m wrong.


Don’t worry now about possible later tax changes. The Chancellor meant that National Insurance will increase long term for you. But there was an immediate big pushback and widespread criticism .... about an ill-timed kick in the teeth comment.