small limited business run from home

lincroft1710

Lesleynauman said:

I've run my small business from an office in my home for 20 years.  I'm self employed and pay whatever tax my accountant tells me to pay every July and January  and have operated the business successfully  with no credit issues during that time but like a lot of people I have no income at the moment.  I'm not registered for business rates as such so apparently don't qualify for the business grant.  I've applied for an overdraft and been turned down also for a bank loan with the same result even with an impeccable credit record with a bank I've use for best part of those 20 years.  How can it be fair that a neighbour has just had a £10,000 grant arrive in their bank account without asking and will also qualify for the 80% self employed refund in June and can still continue to trade albeit on a smaller scale than usual.  If I'm missing the point here then I'd love to hear about it.

You may be eligible for the SEISS scheme

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Businesses who have dedicated business premises will have more overheads than those operated from a room in one's home, hence the grant.

Your bank clearly sees you as a poor risk at the present time because you have no income. Banks have never had a reputation for their charitable attitude (I worked for one for a short time 50 yrs ago and they haven't changed) and clearly they have to be very careful in such a volatile financial climate.

The current government (and I am no fan) is trying to help out where it can and concentrating on those businesses where there is more to lose, e.g. multiple redundancies. Clearly some businesses will suffer (a fact they acknowledged) and sadly it will be those whose loss the government perceive as having the least effect on the national economy.

I presume you have no savings..

seatbeltnoob

i have a small ltd. Paid around £790 pm and topped up with dividends. Saved a lot of tax, I'm sure you all moaning about the furlough scheme (who on the same breath boast about being in business for 20 years) have enjoyed masses of tax savings by paying yourself in a way to avoid national insurance and income tax ove rthe years.

If the government turned around and said, OK we'll give you £2500 a month, but you'll need to pay back all the savings you had from the way you structured your pay over the last few decades, would you take it?

I thought not. Frankly I am happy that they're giving me something, I did not expect them to all sole directors of ltd companies to furlough themselves at all.

seatbeltnoob

pleasedelete said:

sheramber said:

If taking a small salary and the rest in dividends is not to their benefit why do they  do that?

Uneven income especially in the early years. We only earn fees in 9 months of the year and the income varies significantly by month. We started low income high dividend and have adjusted to more monthly income over 10 years but 50% is still dividend. 1 bad July and we would lose 60% of annual profit for example. 
There used to be a tax benefit but that is very negligible now due to change say HMRC. 

Cut the bull, you have saved a tonne in NI and taxes.

The "dividend because irregular profit" makes no sense. That's even more reason to do PAYE. Because dividends can only be paid out of the business in in profit. Where as PAYE can be paid and take the business into a loss.

I too have a seasonal business, in events. I have crappy decembers & januarys. But my income overall across the year is pretty constant year in year out. I have £0 coming in Decembers, but I still pay myself through PAY through the reserves in the company account.

It's not just your seasonal business, every business is the same. Tourism, Festivals, garden centres, all seasonal and they all go up and down in revenue but they pay their directors and staff a fixed salary.

This is what we signed up for when we started businesses. You take the good with the bad, you don't moan if your slice of the pie is smaller than the next mans. The buck stops with you.

pleasedelete

seatbeltnoob said:

pleasedelete said:

sheramber said:

If taking a small salary and the rest in dividends is not to their benefit why do they  do that?

Uneven income especially in the early years. We only earn fees in 9 months of the year and the income varies significantly by month. We started low income high dividend and have adjusted to more monthly income over 10 years but 50% is still dividend. 1 bad July and we would lose 60% of annual profit for example. 
There used to be a tax benefit but that is very negligible now due to change say HMRC. 

Cut the bull, you have saved a tonne in NI and taxes.

The "dividend because irregular profit" makes no sense. That's even more reason to do PAYE. Because dividends can only be paid out of the business in in profit. Where as PAYE can be paid and take the business into a loss.

I too have a seasonal business, in events. I have crappy decembers & januarys. But my income overall across the year is pretty constant year in year out. I have £0 coming in Decembers, but I still pay myself through PAY through the reserves in the company account.

It's not just your seasonal business, every business is the same. Tourism, Festivals, garden centres, all seasonal and they all go up and down in revenue but they pay their directors and staff a fixed salary.

This is what we signed up for when we started businesses. You take the good with the bad, you don't moan if your slice of the pie is smaller than the next mans. The buck stops with you.

You are truly unpleasant, do you get some sad satisfaction by being abusive to strangers on the internet. This board is meant to be helpful, sadly some people have forgotten that. 

unforeseen

The "dividend because irregular profit" makes no sense. That's even more reason to do PAYE. Because dividends can only be paid out of the business in in profit. Where as PAYE can be paid and take the business into a loss.

And where does the business get the money from to pay if they are making a loss? Unlike governments small businesses can't create money and banks aren't that keen to lend money.