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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 15086
Experience:  I have been practising for 30 years.
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Of Ltd company (noone else in company) and I've stopped

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I'm Director of Ltd company (noone else in company) and I've stopped working due to covid 19. I'm working as Civil engineer and can't work from home and places I'm usually working being shut.
What support will be available for me or company from government? I've been looking on gov page and only thing I've seen is sick pay that is £93 week. But do I apply for any grands or anything else to save money?

Good afternoon. I will assist with your question - be aware this is an email not chat service therefore i maybe delayed in replying.

so you are self employed?

and you cannot do any of your work from home?

Customer: replied 6 days ago.
I'm self employed. I can't do any work from home.

You need to be careful with the terminology here.

Initially you say you’re a director of a limited company but then you say you are self-employed.

There is nothing to stop someone being a director of a limited company and being self-employed but that means they would have 2 lots of tax to pay, Schedule E on self-employed earnings and schedule D PAYE and directors earnings/salary.


I think you mean that you are a director of a limited company but there is only you.


If that’s the case then you are employed by your own limited company. You are an employee


At the moment, the only help which is available for self-employed people is universal credit which has quite Draconian means tested criteria.


For employed people on the other hand the government are guaranteeing 80% of unemployed persons wages.


What we don’t know is whether that covers 10%-25% directors and whether just because it’s a limited company with only you win it, you are classed as employed for the purposes of the new legislation.


You need to remember that it’s been announced but not enacted yet, nobody knows what the rules are or how to apply for it (expect that it’s going to be administered by HMRC) although we are told that it’s coming in in April. That has been criticised because obviously people who have lost their income have lost it now, not in April.


So the short answer to your question is that at the moment we simply don’t know what you going to get other than above and what you have read already.


It also remains to be seen how the revenue, who have been getting rid of members of staff left right and centre is going to cope with this overload of work.

Customer: replied 6 days ago.
Yes I'm director or limited company and I'm the only person in company. My salary comes from Director wage + dividends.
Lets say I'm classed as employee, would dividends been classed as salary or only director wage? (dividends makes up main part of salary)
That's probably too early to find out. Don't really want to win much from it, but would be good to cover some of the loss.
I have other question as well regarding insurance policies. I know that best would be to contact the insurance provider, but at this time they are really busy with everyone calling. On policy documents I can't really find anything about cover for pandemics. I have business insurance and I have income protection insurance. My question is, from your experience does insurance companies covering such things as pandemics? And is it something that would clearly been stated in policy or left more for interpretation?


A dividend is not classed as salary. It is taxed differently for a start.


People get paid by dividends because it’s more tax efficient. It remains to be seen how the government will treat any remuneration from a controlling director. You may find they class them the same as self-employed and at present, there is very little help for self-employed except universal credits although whether that will change or not, remains to be seen.


With regard to insurance policies, anything which is not excluded is included.


You would need to check your business policy as to what loss of earnings is included because they vary so widely, it’s not even possible to speculate.


Income protection policies on the other hand have much narrower criteria and they cover either redundancy or business closure and/or sickness/accident.


I have experience of probably the best business closure product that was ever available and even that would not cover this. You would have had to have closed your business and advise the revenue that you had done so. If you had to close your business as a result of this, it would pay out.

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