Read on Twitter
Seeing a bit of blowback on Twitter about "money grabbing small businesses".
Let's have a reality check on the majority of small and micro businesses. I'll lead by example.
My small business employs 3 full time staff including myself. It is a sole trader status./
Let's have a reality check on the majority of small and micro businesses. I'll lead by example.
My small business employs 3 full time staff including myself. It is a sole trader status./
Over the last few years our net payment to UK HMRC (income tax/PAYE/Nat ins/VAT) has been around £55k a year. So that is £50k the UK would not have had, had I not chosen to start a business, employ people and run it.
We operate from rented premises - like most.
We operate from rented premises - like most.
Our profit was over the £50k mark (by a small amount) so there is no support for me personally - and I'm not asking for it.
My staff are OK as they were on PAYE and can be furloughed - but the business has to pay the salary then claim it back - and that is a cashflow issue.
My staff are OK as they were on PAYE and can be furloughed - but the business has to pay the salary then claim it back - and that is a cashflow issue.
Like many in my situation I have stopped taking drawings during this period to try to retain cash in the business so I can keep my staff on. We have been fortunate as we are renting premises that we get the £10k business grant - this is vital in maintaining cashflow.
I have chosen to delay the VAT payment due in April but that is a delay, not a write off. It needs to be paid before March 2021.
So in total, if I furlough staff, and this continues for 3 more months (say) the government will pay us around £19,000 I reckon.
So in total, if I furlough staff, and this continues for 3 more months (say) the government will pay us around £19,000 I reckon.
So let's review that.
During this crisis we get paid £19k
Every year we pay HMRC around £55k.
We pay our taxes, our employers nat Ins, employee pensions. I am lucky. My business has the ability to continue trading and I have enough reserves available, but many cannot and don't.
During this crisis we get paid £19k
Every year we pay HMRC around £55k.
We pay our taxes, our employers nat Ins, employee pensions. I am lucky. My business has the ability to continue trading and I have enough reserves available, but many cannot and don't.
The reason I have some reserves set aside was becuase my business was badly affected by Brexit through cancelled projects and delays. So I chose not to invest as much as we would normally do in new hardware and systems. I chose not to employ another designer...just in case.
You can argue disaster preparations kicked in early for us. We can weather this but we are not "rolling in cash" like many ill informed people seem to be saying. These people invariably are those on full salaries or pensions, unaffected by all this. If you don't live it, shut it.
Rant over, and back to work!
