Call Us: 01903 367073
☰

Emjay Associates Ltd

Licensed Accountants
  • Home
  • About
  • Services
    • Small Business Payroll
    • Tax Services
    • Accounting
  • Blog
  • Resources
  • Contact
  • Impacts

The cost of Covid-19

April 25th, 2020 | Posted by: pete | No Comments

During the World War 2 Blitz in Britain 32,000 civilians were killed, the blitz lasted 8 months 5 days. In the UK since 28 February Covid-19 has killed 18,738 up to 23 April (56 days). One US institute has forecast the total deaths in the UK could be in the region of 37,494. PH England are forecasting 30,000 by th end of May

The UK borrowed approx £145 million in 1945 and it was not repaid until 2006. So far the government has pledged support at £122 billion, how long will our children / grand children / great grand children to repay this debt?

We have heard many comments that support is in place to keep businesses from closing, local council Grant’s, rate free periods, Job Retention Scheme to support employees. The key being to ensure we do not have a major increase in unemployment. One flaw in the strategy is the business owners are not getting any personal financial support. Small business director/shareholders can claim £575.20 this anomaly is because the majority of their monthly income would come from dividends. 

You may consider this fair as dividends are tax at lower rates than PAYE, add the cost of Corporation Rax paid and dividends are being taxed at 26.5% very close to the tax paid by self employed workers who are entitled up to £2500 per month and who can still earn from their commercial operation. Directors are not allowed to do this and can only fulfill their legal obligations

Director £30,000 – Salary £8,632.  Profits (£30,000 – £8,632) = £21,368

Corporation tax £4,060.  Dividends £17,308.  Dividend tax £858.  Take Home £25,082 (Total tax paid £4,918)                          

Self Employed £30,000 – Profits £30,000.  Income tax £3,500. Class 2 NIC £156. Class 4 NIC £1,923. Take home £24,421 (Total Tax & NI  £5,579)

Difference between Director and Self Employed Take home £661 (£12.71 per week!) This is only an illustration of one payment scenario – the most commonly used, and the current cap on the SEISS scheme, being £2500

We know the government have constantly mentioned that banks should be assisting with loans, how long are businesses expected to wait for answers on their applications. Many small businesses will close their doors forwver before the bank make their decision.

Leave a Comment Cancel reply

You must be logged in to post a comment.

  • Testimonials

    • Emjay Associates Ltd have always been there with helpful advice for my small business. They are an accountancy company that helps you grow your business

      Jim Williams Satisfied Customer
    •  

      After appointing Emjay Associates as our accountants (following a referral), we cannot thank them enough for obtaining a reduction in our tax liability of over £17,5000. They spotted a mistake in previous years returns and then spent time analysing our CIS returns and subsequently dealing with HMRC.

      A Big thank you

      Thank You Dave - CPS Property Services
    • I would like to take this opportunity to thank you for all your input into our business this year, you are such a font of knowledge, not just about the accounting side but in all business matters and it's great to get advice from you.

      KG – Greenfield Services Greenfield Services (Southern) Ltd
       
  • Blog Archives

    • March 2021
    • May 2020
    • April 2020
    • March 2020
    • September 2019
    • July 2019
    • April 2019
    • June 2018
    • May 2018
    • January 2018
    • February 2017
    • March 2016
    • January 2016
    • December 2015
  • © Copyright 2021 Emjay Associates Ltd - AD5 Littlehampton Marina Ferry Rd Littlehampton BN17 5DS - Company Registration Number: 8611388 Registered in England & Wales
  • Phone: 01903 367073