Do I really have no option but a bank loan....?

68ComebackSpecial

mobilejo said:

Grumpy_chap said:

The advice to draw dividends plus a small salary was prudent at the time it was given.

It is still prudent now depending on circumstances (i.e how much you extract from your company each year) - I can only plan based on current tax rates as we do not know in what way, or how, they may change in the future. But under the current system, I would still not change how I remunerate myself. 

You would need to pay yourself PAYE of just the right amount to ensure that you're not earning over whatever arbitrary limit the Gov set for support  - this time, it was 'earn over £50k and you're not eligible for furlough' - next time, if there is a next time, that limit could go up or down. Get it wrong by paying £49k in PAYE if the limit for the next round gets set to £45k, and the whole thing has been for nothing. 

But then also factor in different in total take home pay based on high PAYE + less dividends v low PAYE + high dividends. On my own calculations, I have saved around £45k over the last few years by opting for low PAYE. I would not be getting that much support via furlough if I needed it.

I would rather have the money I have saved over the years, than have paid extra to HMRC only to try and claim something back now.

I guess you could call me #excludedbychoice

That's incorrect - there was no earnings limit over which an employee was not eligible for furlough. It was capped at £2,500 per month and even someone earning a PAYE salary of £1 million p.a. could have received this amount. I think you are confusing it with the £50k limit for SEISS.

mobilejo

68ComebackSpecial said:

mobilejo said:

Grumpy_chap said:

The advice to draw dividends plus a small salary was prudent at the time it was given.

It is still prudent now depending on circumstances (i.e how much you extract from your company each year) - I can only plan based on current tax rates as we do not know in what way, or how, they may change in the future. But under the current system, I would still not change how I remunerate myself. 

You would need to pay yourself PAYE of just the right amount to ensure that you're not earning over whatever arbitrary limit the Gov set for support  - this time, it was 'earn over £50k and you're not eligible for furlough' - next time, if there is a next time, that limit could go up or down. Get it wrong by paying £49k in PAYE if the limit for the next round gets set to £45k, and the whole thing has been for nothing. 

But then also factor in different in total take home pay based on high PAYE + less dividends v low PAYE + high dividends. On my own calculations, I have saved around £45k over the last few years by opting for low PAYE. I would not be getting that much support via furlough if I needed it.

I would rather have the money I have saved over the years, than have paid extra to HMRC only to try and claim something back now.

I guess you could call me #excludedbychoice

That's incorrect - there was no earnings limit over which an employee was not eligible for furlough. It was capped at £2,500 per month and even someone earning a PAYE salary of £1 million p.a. could have received this amount. I think you are confusing it with the £50k limit for SEISS.

You're right - thanks for pointing that out. I was confusing it with the 'hard' cut off for SEISS.

Even so, the benefit of being furloughed vs the long term savings of low PAYE just wouldn't stack up for me and other people based on the amount they are actually extracting.

Unless we know when the next 'crisis' is going to be, it seems risky to start paying more in NIC for the next how many years, just in case a Gov furlough scheme comes around again.

Surely its better to save the NICs each year and make your own emergency fund? 

Jeremy535897

It depends on your best guess, but "a bird in the hand" is often the best advice.

EmmieAwards

Thanks guys 
So much to think about, but looks like I should just go dormant and get a job. Was my first year of business, taxes haven’t been filed yet,  bit gutted as if I was on PAYE, I would have made some real money lol, but not life ruining like has happened with some. As for loans from banks, I dunno, might be more trouble than it’s worth. Perhaps a start up loan, but again with so much uncertainty that would be quite risky.

thanks anyway guys