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Small business owners- Our workers get paid but not us
Janeyjo
Posts: 1 Newbie
hi Me and my husband own a small design/manufacturing company and employ 4 people . we have furloughed our staff in order to hopefully preserve their jobs after this dies down . However as - Like many small business owners - on our accountants advice, we pay ourselves in dividends , it appears we will not receive anything. We pay a hefty corporation tax on our profits and we pay tax on our dividends so I do not understand why we are being shafted like this ?
There must be many others in this situation . What can we do about this ? There will be no money coming into our household and we have teenage sons , bills and mortgage to pay like everyone else. Plus all our staff are sitting at home doing nothing and getting paid .I think this will finish us off and we wont have a business to come back to.Does not seem fair
There must be many others in this situation . What can we do about this ? There will be no money coming into our household and we have teenage sons , bills and mortgage to pay like everyone else. Plus all our staff are sitting at home doing nothing and getting paid .I think this will finish us off and we wont have a business to come back to.Does not seem fair
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Comments
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Do you not pay yourselves any salary - often around the limit for National Insurance deductions?1
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The norm is dividends and a basic pay. And many accountants advise that.
The basic pay side , i think you will get help with.
It was your choice/ decision on how you got paid. (theres a lot of people , that had a good ride on the gravy train and it now looks like its the last stop)
Have you got any business property you pay rates on or get relief on?
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If needed look at eligibility for Universal Credit https://www.citizensadvice.org.uk/benefits/universal-credit/.
There are online calculators to help you assess entitlement https://www.gov.uk/benefits-calculators
Be aware that claiming UC will end any Tax Credits you currently get.
You will be excluded from UC if you have savings over £16,000.
Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
It does seem that you will only be eligible as far as the government help through furloughing employees will be limited to 80% of your PAYE, probably around £570 each a month. But that too would be dependent on your doing no work other than your legal requirements as directors.
Do you have business premises? Is their some grants available for those?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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