Small business no profit

Fabwitch

I’m a small business operating last two years renting a room within a building so not responsible for the rates. I took out a loan to start the business up which I’ve been paying off so have no profit at all. I take a small salary under £11,000 in order so I could pay off the loan quicker. I now find myself getting no help at all for the business as I haven’t made any profit. I still have rent, phone bill, professional fees and organisations fees to pay each month for the business. Even if I furlough myself and get 80% grant from the government that will cover my household bills but not my business bills which are completely separate. It seams working hard the last two years trying to pay off the loan quicker I’m now penalised as my accounts shows I have made no profit. If I hadn’t paid off the loan early I would have showed profit and been entitled to help in the way of a grant. The system is unfair.

Castle

Only the interest on the loan is offset against your income; the capital element has no effect on your profit.

mobilejo

Fabwitch said:

I’m a small business operating last two years renting a room within a building so not responsible for the rates. I took out a loan to start the business up which I’ve been paying off so have no profit at all. I take a small salary under £11,000 in order so I could pay off the loan quicker. I now find myself getting no help at all for the business as I haven’t made any profit. I still have rent, phone bill, professional fees and organisations fees to pay each month for the business. Even if I furlough myself and get 80% grant from the government that will cover my household bills but not my business bills which are completely separate. It seams working hard the last two years trying to pay off the loan quicker I’m now penalised as my accounts shows I have made no profit. If I hadn’t paid off the loan early I would have showed profit and been entitled to help in the way of a grant. The system is unfair.

Are you a ltd co director or self-employed?

Fabwitch

Castle said:

Only the interest on the loan is offset against your income; the capital element has no effect on your profit.

So why has my accountant said I’m not entitled to anything then

Fabwitch

mobilejo said:

Fabwitch said:

I’m a small business operating last two years renting a room within a building so not responsible for the rates. I took out a loan to start the business up which I’ve been paying off so have no profit at all. I take a small salary under £11,000 in order so I could pay off the loan quicker. I now find myself getting no help at all for the business as I haven’t made any profit. I still have rent, phone bill, professional fees and organisations fees to pay each month for the business. Even if I furlough myself and get 80% grant from the government that will cover my household bills but not my business bills which are completely separate. It seams working hard the last two years trying to pay off the loan quicker I’m now penalised as my accounts shows I have made no profit. If I hadn’t paid off the loan early I would have showed profit and been entitled to help in the way of a grant. The system is unfair.

Are you a ltd co director or self-employed?

I’m limited

mobilejo

Fabwitch said:

mobilejo said:

Fabwitch said:

I’m a small business operating last two years renting a room within a building so not responsible for the rates. I took out a loan to start the business up which I’ve been paying off so have no profit at all. I take a small salary under £11,000 in order so I could pay off the loan quicker. I now find myself getting no help at all for the business as I haven’t made any profit. I still have rent, phone bill, professional fees and organisations fees to pay each month for the business. Even if I furlough myself and get 80% grant from the government that will cover my household bills but not my business bills which are completely separate. It seams working hard the last two years trying to pay off the loan quicker I’m now penalised as my accounts shows I have made no profit. If I hadn’t paid off the loan early I would have showed profit and been entitled to help in the way of a grant. The system is unfair.

Are you a ltd co director or self-employed?

I’m limited

In which case, profits are not relevant. The profits are the profits of the company, and the government is not funding the company. They are funding you; the individual. Your company bills are not relevant - they will never be covered. As a limited company director, you HAVE to separate yourself from the company. You have bills that you pay to live, and the company has bills that it pays to continue in business. There is no support available for the latter.

All that matters is your salary of £11k. If you have lived on that before, why would you expect the government to give you more than that now? 

Fabwitch said:

Castle said:

Only the interest on the loan is offset against your income; the capital element has no effect on your profit.

So why has my accountant said I’m not entitled to anything then

How has your £11k been paid? Have you been paid that as salary via a PAYE scheme run through RTI, monthly? 

Fabwitch

mobilejo said:

Fabwitch said:

mobilejo said:

Fabwitch said:

I’m a small business operating last two years renting a room within a building so not responsible for the rates. I took out a loan to start the business up which I’ve been paying off so have no profit at all. I take a small salary under £11,000 in order so I could pay off the loan quicker. I now find myself getting no help at all for the business as I haven’t made any profit. I still have rent, phone bill, professional fees and organisations fees to pay each month for the business. Even if I furlough myself and get 80% grant from the government that will cover my household bills but not my business bills which are completely separate. It seams working hard the last two years trying to pay off the loan quicker I’m now penalised as my accounts shows I have made no profit. If I hadn’t paid off the loan early I would have showed profit and been entitled to help in the way of a grant. The system is unfair.

Are you a ltd co director or self-employed?

I’m limited

In which case, profits are not relevant. The profits are the profits of the company, and the government is not funding the company. They are funding you; the individual. Your company bills are not relevant - they will never be covered. As a limited company director, you HAVE to separate yourself from the company. You have bills that you pay to live, and the company has bills that it pays to continue in business. There is no support available for the latter.

All that matters is your salary of £11k. If you have lived on that before, why would you expect the government to give you more than that now? 

Fabwitch said:

Castle said:

Only the interest on the loan is offset against your income; the capital element has no effect on your profit.

So why has my accountant said I’m not entitled to anything then

How has your £11k been paid? Have you been paid that as salary via a PAYE scheme run through RTI, monthly? 

Yes I’m on the payroll paye

mobilejo

Unless your accountant knows something you haven't told us, you can get 80% of your £11k salary.

Best to ask him exactly why he says you are not entitled to anything.