Self Employed-Corona Virus Self Help

[J.R.]

I'm glad to have left all that behind me, now I declare my Apparthôtel rental income under a simplified forfait régime, I fill out one box on my tax return with the annual turnover and thats it!!!

 

They give me a very generous allowance of 71% against notional costs and am assessed for tax & social charges on a notional gross profit of 29% which is way below what it actually is, I could declare under a régime réel if my operating costs were higher, if I had a mortgage or rent to pay on the building etc.

 

The drawback will be this year where I will make a significant loss yet still pay taxes on a notional profit but hey you cannot have it both ways, the other downside this year is as its considered investment income & myself being inactif (nothing could be further from the truth) I will not qualify for any government bails outs etc because of Covid 19.

 

Swings & roundabouts but its really nice to be free from mandatory accounting.

[Lady Elanore]

So do you have enough put aside to cover yourself or are you looking to more drastic measures?

[xman]

Just a reminder to people running UK limited companies. Annual accounts need to be filed at the latest 9 months and one day after your financial year end. Corporation tax is also not due until then. Personal tax returns by Jan 31 of the following tax year.

 

So there is really no need to engage an accountant for anything up to another eight months or more. Every accountant I know bills annually after year end accounts have been signed off and submitted to companies house.

 

In the present situation I would expect both accountants and HMRC be sympathetic to affected companies and cut them some slack regarding payment and deadlines and expect to hear something in the coming months about deadline extensions.

 

Almost all limited companies are obliged to run RTI for PAYE monthly, a few run quarterly, so directors should know exactly where they stand regarding PAYE at any point in time. And so how much to claim for a furloughed employee.

 

 

Edited 1 April, 2020 by xman

[moley]

5 hours ago, xman said:

So there is really no need to engage an accountant for anything up to another eight months or more.

That's assuming that your accountants can complete your books in the time frame, especially if a large proportion of their clients drop their books in at the same time. 

 

HMRC be sympathetic. 

That would be a first. 

 

[xman]

4 hours ago, moley said:

That's assuming that your accountants can complete your books in the time frame, especially if a large proportion of their clients drop their books in at the same time. 

 

That's something to ask your accountant. Its also one of several reasons why its a good idea to have a completely different financial year end date to the tax year end date.

 

Year end dates can be changed subject to certain rules

https://geniusaccountancy.com/change-companys-year-end/

 

Regarding HMRC payment difficulties

https://www.gov.uk/difficulties-paying-hmrc

 

 

Edited 1 April, 2020 by xman

[J.R.]

12 hours ago, Lady Elanore said:

So do you have enough put aside to cover yourself or are you looking to more drastic measures?

 

That depends 🙁on how long it goes on, just learned that you can apply for support if your business was one that had to close (anything recieving the public except hôtels - me) or if Marches turnover was down more than 70%, a simple procedure on Les Impôts website but it wont allow me to because I dont have a Siret or Siren number = business registration number.

 

Already hit this brick wall when I tried to claim the prime d'activité which is a subsidy to bring you up to the minimum wage, couldn't get that either, and the final irony is that the businesses that claim these benefits are also absolved from paying the monthly payments for impôts, untilities, rent etc during the shutdown, I still have to pay with zero coming in, they get paid 80% of last years figures and get a payment holiday.

 

Dont know what drastic measures I could take, cant sell anything as people cannot travel to buy even if there were a buyer, cant do anything with the UK properties without being there and cannot travel, got an enquiry this morning which actually scared me because it could be someone looking to squat an empty property.

[Lady Elanore]

1 hour ago, J.R. said:

 

That depends 🙁on how long it goes on, just learned that you can apply for support if your business was one that had to close (anything recieving the public except hôtels - me) or if Marches turnover was down more than 70%, a simple procedure on Les Impôts website but it wont allow me to because I dont have a Siret or Siren number = business registration number.

 

Already hit this brick wall when I tried to claim the prime d'activité which is a subsidy to bring you up to the minimum wage, couldn't get that either, and the final irony is that the businesses that claim these benefits are also absolved from paying the monthly payments for impôts, untilities, rent etc during the shutdown, I still have to pay with zero coming in, they get paid 80% of last years figures and get a payment holiday.

 

Dont know what drastic measures I could take, cant sell anything as people cannot travel to buy even if there were a buyer, cant do anything with the UK properties without being there and cannot travel, got an enquiry this morning which actually scared me because it could be someone looking to squat an empty property.

 

 

Yikes and double yikes! That sound awful. Lots of tunnels and no lights at the end of any of them. Hopefully France will show some common sense, there must be many in your position?

 

I'm still hopeful something can be done for people in a similar position to myself over here. Ideally I'll get support and then i'll postpone payments of things as late as I can but within legal time frames, really just because I hate the idea of having to renege on an agreement, such as car payments or even the dreaded Corporation Tax. At this time of year most people in my position will have this money ready to go sitting in an account. If people sit on this money to avoid doing end of year accounts and therefore having to pay even more money out (to their accountants)  then HMRC is not going to see the money anyway, at least not until somewhere around the end of the year (2020) of even later, so why not give us something capped at say £6K? and assume that covers us for the first 3 months of this downtime. If we are still locked down and not working in June then hopefully they will have something in place to keep us going beyond that date. Almost a guaranteed scenario imho, but at least it buys us 3 months. I am assuming that for HMRC at least, money not coming in (our Corp tax) is not as bad as money they (HMRC) are having to give out from their coffers. 

[xman]

Just an additional note on those who will be applying for a grant under what is called the coronavirus job retention scheme

 

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

 

Grants will attract PAYE, NIC (both employee and employers), AND Corporation tax.

 

You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

 

Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. 

 

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

 

Edited 1 April, 2020 by xman

[J.R.]

7 hours ago, Lady Elanore said:

 

 

Yikes and double yikes! That sound awful. Lots of tunnels and no lights at the end of any of them. Hopefully France will show some common sense, there must be many in your position?

 

 

I would say that my position is probably quite unique.

 

I have enough savings for quite a while, the loss of revenue even after 6 months will be a spit in the ocean compared to what has gone from my savings in the last year through other circumstances and that was doubled in a couple of weeks by the 70% collapse in value of the only shareholding that I have, it was €20K invested more than 20 years ago that for most of that time was worth only 1/3 of that, it finally went up 2 years ago and now has dropped even lower than that.

 

Very similar story for the 2 small pension funds taken out at the same time, I dare not look at them but they will have fallen equally, the worst is that a year ago I turned 60 and could have drawn them but as still working decided not to, a costly mistake, normally taking a pension later means it pays a little more, in this case they will have gone down 50-70%, I do not dare look.

 

What I am saying is that the financial support needed & recieved during the confinement will pale into insignificance compared to the long term overall economic losses for individuals, companies and countries.

[Lady Elanore]

It's going to be years before we get ourselves out of this mess. Hope you have enough to see it through without any more problems. I'm still intending to give it a month before I try anything that might jeopardise a future solution from HMRC.

 

Mind you I'm assuming I won't have gone stark staring mad by then and put on so much weight from eating crud and not exercising enough, I'll probably need a winch to get out of the sofa. All that will be left will be a hand appearing out of a huge divot in the settee and a remote control thrust ever upwards like the Statue of Liberty at the end of Planet of the Apes.  

[lol-lol]

14 hours ago, J.R. said:

 

I would say that my position is probably quite unique.

 

I have enough savings for quite a while, the loss of revenue even after 6 months will be a spit in the ocean compared to what has gone from my savings in the last year through other circumstances and that was doubled in a couple of weeks by the 70% collapse in value of the only shareholding that I have, it was €20K invested more than 20 years ago that for most of that time was worth only 1/3 of that, it finally went up 2 years ago and now has dropped even lower than that.

 

Very similar story for the 2 small pension funds taken out at the same time, I dare not look at them but they will have fallen equally, the worst is that a year ago I turned 60 and could have drawn them but as still working decided not to, a costly mistake, normally taking a pension later means it pays a little more, in this case they will have gone down 50-70%, I do not dare look.

 

What I am saying is that the financial support needed & recieved during the confinement will pale into insignificance compared to the long term overall economic losses for individuals, companies and countries.

 

It depends on how one has allocated the fund in ones pension scheme.  If one has got for higher risk putting the pension contributions purely in to stock market share then one would have had a one third hit say on the FTSE 100.

If one has put some funds in to Bonds/Gilts then there is no hit at all.

 

As one Financial Advisor said to me, take your age and put that percentage in to non risk assets. Have done this and still planning to retire in a year or two when I am around 60.

A hard lesson but one people should have learnt in 2008 and the previous roughly decade apart "corrections"/disasters.  

[gadgetman]

@Lady Elanore Martin Lewis mentioned TV folk on his show tonight 

[Lady Elanore]

2 minutes ago, gadgetman said:

@Lady Elanore Martin Lewis mentioned TV folk on his show tonight 

 

 

I saw it and came away just as disappointed. I'm guessing the floor crew have had a chat with him and he's shrugged his shoulders and said, "sorry, but that's all folks". Beginning to think we have lost our impetus and the government is going to walk away from helping us properly. 

[moley]

Had a few emails from some of my customers over the last few days to say that payments will be slower than usual. Some customers have phoned or emailed asking if I can come in and carry out maintenance or machine moves while they are shut down. 

[gadgetman]

7 minutes ago, moley said:

Had a few emails from some of my customers over the last few days to say that payments will be slower than usual. Some customers have phoned or emailed asking if I can come in and carry out maintenance or machine moves while they are shut down. 

Given how most are behaving towards suppliers and contractors, I would ensure they make some payment up front. 

 

Too many stories of companies refusing to pay later 

[moley]

7 minutes ago, gadgetman said:

Given how most are behaving towards suppliers and contractors, I would ensure they make some payment up front. 

 

Too many stories of companies refusing to pay later 

I have been dealing with most of these customers for over fifteen years and I have never asked for money up front.

[Lady Elanore]

I'm owed a few grand from one company and a far as I can tell they have furloughed all their office staff

[gadgetman]

21 minutes ago, moley said:

I have been dealing with most of these customers for over fifteen years and I have never asked for money up front.

That is currently meaning nothing. 

 

If you've got such a good understanding with them, then paying up front shouldn't be an issue for them. 

 

If it is, then alarm bells should be ringing that you might not get paid. 

Edited 4 April, 2020 by gadgetman

[xman]

30 minutes ago, gadgetman said:

That is currently meaning nothing. 

 

If you've got such a good understanding with them, then paying up front shouldn't be an issue for them. 

 

If it is, then alarm bells should be ringing that you might not get paid. 

 

Maybe.

 

But 15yrs means a lot of trust, probably knowing people on first name terms. Trust works both ways. Cashflow is always an issue, demanding payment up front may simply sour the relationship. Only @moley can make that judgement.

 

Sometimes supporting customers through difficult times brings big dividends later, certainly did in my experience of 30+ years in business.

 

Edited 4 April, 2020 by xman

[Lady Elanore]

I'm loving how South Africa are telling people what distance to keep away from others

 

 

Edited 7 April, 2020 by Lady Elanore

[Lady Elanore]

The Queen has given good advice

 

[Chris GB]

On 04/04/2020 at 21:30, xman said:

 

Maybe.

 

But 15yrs means a lot of trust, probably knowing people on first name terms. Trust works both ways. Cashflow is always an issue, demanding payment up front may simply sour the relationship. Only @moley can make that judgement.

 

Sometimes supporting customers through difficult times brings big dividends later, certainly did in my experience of 30+ years in business.

 

 

That has certainly been my experience too.

[@Lee]

6 hours ago, Lady Elanore said:

The Queen has given good advice

Not the best idea to do that speech in a plain green dress. Turned out it was a perfect 'green screen' backdrop for photoshop

 

[Lady Elanore]

I think you'll find that Her Majesty is a dyed in the wool magpie fan 

[@Lee]

8 minutes ago, Lady Elanore said:

I think you'll find that Her Majesty is a dyed in the wool magpie fan 

Nah, I think you'll find that HM the Queen prefers Arsenal, Villa and images of cats