Help for Limited companies who pay themselves dividends

IMD2012

My wife and I are in a similar position. It is bizarre that dividends are not taken into consideration for benefit. 
If we were self employed we would be given 80% of our profit and without the hassle of applying for it. On top of that we could still work and it also applies to anyone receiving the state pension. How can this be right? We strongly suspect our business will fold as everything is stacked against us.

Hermann

IMD2012 said:

My wife and I are in a similar position. It is bizarre that dividends are not taken into consideration for benefit. 
If we were self employed we would be given 80% of our profit and without the hassle of applying for it. On top of that we could still work and it also applies to anyone receiving the state pension. How can this be right? We strongly suspect our business will fold as everything is stacked against us.

The self employed will have to apply for it, they are going to be sent a claim form, they don't apply for the claim form HMRC automatically send it to those eligible to apply.

In reality the self employed have no idea whether they will be getting a grant or not as no one knows whats on the claim form so we don't know how loss of trade will be quantified.

The self employed need to carry on working because they may well not be getting any grant at all.

Nothing about government grants or benefits has ever been 'fair' and the response to this crisis is no exception. There have been people suffering from the 'injustice' of the system for years but those raising such issues are usually labelled 'benefit scroungers', I wonder if this experience will change that.

General_Grant

maxsound said:

I can see where you are all coming from with this and i do get it but feels wrong most other's are getting help who have savings.
Now one predicted any of this happening otherwise i`d had chosen not to pay myself via dividends and certainly not be a ltd company that`s for sure.

I suppose your savings have been built up in part by legally not paying tax of various kinds on your income by taking it out of PAYE and others may have savings from funds after they have paid PAYE/NI.

Grumpy_chap

You can furlough yourself and claim 80% of whatever PAYE you do pay yourself.  If you have no work anyway in your Ltd company, then this furlough is far more generous than JSA, which is what there would be any other time that the business had no work and folded for any other reason.

silvercar

maxsound said:

I can see where you are all coming from with this and i do get it but feels wrong most other's are getting help who have savings.
Now one predicted any of this happening otherwise i`d had chosen not to pay myself via dividends and certainly not be a ltd company that`s for sure.

A lot of people didn't have a choice in working as a limited company because their suppliers or customers would only deal with them as a business not as an individual, or they had to register for VAT or needed to be a company to get the right sort of finance for their work or wanted the protection of being 'limited'. It isn't merely a case of choosing a way to limit the tax burden.

Thrugelmir

silvercar said:

maxsound said:

I can see where you are all coming from with this and i do get it but feels wrong most other's are getting help who have savings.
Now one predicted any of this happening otherwise i`d had chosen not to pay myself via dividends and certainly not be a ltd company that`s for sure.

A lot of people didn't have a choice in working as a limited company because their suppliers or customers would only deal with them as a business not as an individual, or they had to register for VAT or needed to be a company to get the right sort of finance for their work or wanted the protection of being 'limited'. It isn't merely a case of choosing a way to limit the tax burden.

How profits made are distributed is a choice. 

John_

maxsound said:

Hello all, The funds are in just general savings , i`m not vat registered (thank god) but seems like everyone is saying the same thing being there`s absolutely no help available regarding any kind of grant what so ever for any of us in this category which to me is disgusting.
The government really do need to address this as soon as possible because how can any business survive on nothing?

You’ve been playing around with your income to minimise the tax that you pay, in effect claiming that you earn pretty much nothing, but have an investment paying dividends. This obviously has an upside some of the time, but also comes with risks, as you are now seeing. It’s not disgusting, it’s the direct consequence of you choosing not to pay the income tax that your income would have produced if you’d played it straight.

unforeseen

When you take into account corporation and dividend tax as well then there is little difference in tax bills. Slight saving on NI is about the only thing

whizzywoo

It's only quite recently that the tax and NI savings from taking profits as dividends has become quite small. For many many years it was a big saving.

Thrugelmir

unforeseen said:

When you take into account corporation and dividend tax as well then there is little difference in tax bills. Slight saving on NI is about the only thing

What is considered slight?