Help for single director companies

nickykittykat

Potbellypig said:

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

You can't deliberately give yourself a wage whereby you don't pay tax, whilst using the dividend system to pay less tax, and now expect the system to help you out. You can't have your cake and eat it.

Oh and I'm in exactly the same position.

Do you believe that is fair, even in an unprecedented crisis?  

Jeremy535897

I didn't answer that, did I? I suppose that's because it doesn't matter whether I (or you) think it's fair or not. It probably falls into the category of "poetic justice". Do you think you saved £7,500 or more in tax in the past by not taking salary?

Potbellypig

nickykittykat said:

Potbellypig said:

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

You can't deliberately give yourself a wage whereby you don't pay tax, whilst using the dividend system to pay less tax, and now expect the system to help you out. You can't have your cake and eat it.

Oh and I'm in exactly the same position.

Do you believe that is fair, even in an unprecedented crisis?  

Yes. What we could have done is pay ourselves the full amount in wages instead of dividends (not forgetting other tax benefits too) and we'd be laughing right now. But we didn't for obvious reasons.

neilmcl

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

TBH we all go into working for ourselves and running our own businesses with our eyes open to the fact that we can have good times as well as bad, how's this any different?

neilmcl

nickykittykat said:

Potbellypig said:

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

You can't deliberately give yourself a wage whereby you don't pay tax, whilst using the dividend system to pay less tax, and now expect the system to help you out. You can't have your cake and eat it.

Oh and I'm in exactly the same position.

Do you believe that is fair, even in an unprecedented crisis?  

Fair to who? The whole point of these bailouts is for the government to allow businesses, employees and now the self-employed who could go out of business a lifeline to survive. It's not about "he got his, where's mine".

nickykittykat

neilmcl said:

nickykittykat said:

Potbellypig said:

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

You can't deliberately give yourself a wage whereby you don't pay tax, whilst using the dividend system to pay less tax, and now expect the system to help you out. You can't have your cake and eat it.

Oh and I'm in exactly the same position.

Do you believe that is fair, even in an unprecedented crisis?  

Fair to who? The whole point of these bailouts is for the government to allow businesses, employees and now the self-employed who could go out of business a lifeline to survive. It's not about "he got his, where's mine".

I suppose 'fair' is the wrong word.  Rightly or wrongly, I (quite legally I may add) decided on the advice of my accountant to become a Ltd Co rather than self employed.  I certainly have not been living a smug, privileged life on the back of it.  I have worked exceptionally hard, with 2 boys to support, having gone through a divorce and an ex husband with a terminal illness who doesn't pay me a bean.  Regardless of how we got here, isn't it in the Gov's interest to keep my business going, as any other?  The smugness of saying 'you can't have your cake and eat it too' really gets to me in this situation.  I am a good, honest tax payer and in these unprecedented times, I would hope to be supported. I am a small 1 man business - not Apple or Microsoft!

jimmy_f

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

I'm not sure if I am reading cinism  here or not, maybe the latter. Most company directors pay themselves this way, it's not cheating the system it is perfectly legal and normal. Most of these companies pay large corporation tax bills as mine does on the other hand. 

jimmy_f

Sorry Cynism !

neilmcl

nickykittykat said:

neilmcl said:

nickykittykat said:

Potbellypig said:

nickykittykat said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

- Genuine question - do you think I should be penalised for that now?  In other words  I had  a 'benefit' up front so now this crisis has hit it's tough luck?  

You can't deliberately give yourself a wage whereby you don't pay tax, whilst using the dividend system to pay less tax, and now expect the system to help you out. You can't have your cake and eat it.

Oh and I'm in exactly the same position.

Do you believe that is fair, even in an unprecedented crisis?  

Fair to who? The whole point of these bailouts is for the government to allow businesses, employees and now the self-employed who could go out of business a lifeline to survive. It's not about "he got his, where's mine".

I suppose 'fair' is the wrong word.  Rightly or wrongly, I (quite legally I may add) decided on the advice of my accountant to become a Ltd Co rather than self employed.  I certainly have not been living a smug, privileged life on the back of it.  I have worked exceptionally hard, with 2 boys to support, having gone through a divorce and an ex husband with a terminal illness who doesn't pay me a bean.  Regardless of how we got here, isn't it in the Gov's interest to keep my business going, as any other?  The smugness of saying 'you can't have your cake and eat it too' really gets to me in this situation.  I am a good, honest tax payer and in these unprecedented times, I would hope to be supported. I am a small 1 man business - not Apple or Microsoft!

Me too but you must admit that when you decided to go down the freelance route you did it in full knowledge that there will be good times as well as bad and presumably you factored these "bad times" into your financial planning.

nickykittykat

jimmy_f said:

Jeremy535897 said:

If your salary was deliberately low, it means one of two things:

• you didn't need the money so left it in the company to save tax
• you took the money as dividends to save tax

I'm not sure if I am reading cinism  here or not, maybe the latter. Most company directors pay themselves this way, it's not cheating the system it is perfectly legal and normal. Most of these companies pay large corporation tax bills as mine does on the other hand. 

Exactly.  Let's hope they recognise this in coming days