The Professional Briefing: Small Ltd Companies

For Guild members who run their businesses as small ltd companies the situation is different. New Guild member Georgia Glynn Smith is one such and here she explains the differences and what she’s been doing to make sure small companies don’t suffer unduly:

‘At the beginning of lockdown – which seems another life ago – I listened with great anticipation to the Chancellor of the Exchequer Rishi Sunak’s speech. He was so full of promise. It was so inspiring, so different from what one might expect from such a right-wing party. “We are all in this together” said Rishi. “Parity” said Boris. Then at the end of the speech, as a sole director of a small Ltd company, I realised neither Stef ([Georgia’s husband Stefan Gates and] also Sole Director of his own Ltd company) and I – would not be helped. We could furlough ourselves and we would be offered something – 80% of our “salary” which would be £584 per month BUT we would not be allowed to work. The dividends that we topped our salary up with would not be counted as our hard-earned salary. It was irrelevant that we had paid corporation tax on them as well. We were told to do our accounts, we could not promote our business, do our websites, use social media to promote anything that might help the business in the future! I’m not the kind of chick who sits around not doing anything. I always have many a project on the go, being told to stay indoors and not do anything was completely out of my DNA.

As a standard Ltd company an accountant would suggest that you pay yourself a standard wage of £8,000 per year, which you then top up with “dividends” depending on how much the company earned throughout the year. Running such a company has been standard practice for freelancers who were not working regularly and didn’t have sufficient confidence in the business’s expected income to be able to pay themselves through PAYE. It was encouraged by the government when the scheme was set up. As a regular self-employed person who wasn’t operating as a Ltd company, in the current situation the government was offering you up to £2,500 per month. There seemed to be something simply quite wrong to me about this, “unfair”, “unjust”, “forgotten”, whatever you wanted to call it. I started slowly but surely to find out more.

On 8 April I was having a particularly bad day. Every time I switched on my phone it seemed to be more people offering free photography courses, pictures of everyone’s lockdown meals, fitness classes, the pressure was too immense.  I had a moment of realisation – my long career was now over as I had ever known it. This was a hard reality check – I have more often than not identified myself with my career. I do do many different things, but am known more as a photographer than anything else (my portfolio career includes designing interiors, gardens, social media management, creative direction of companies, branding consultant) – most importantly it is also the career that pays the majority of my income. Now the world and his wife, and kids- are all learning how to take great pics for free on endless courses – they can all do this on their phones. Even TV shows are being produced on phones. This is not me being paranoid, it is a reality. I wondered if I should start teaching too? I did a week’s worth of Live insta tv, but I realised I needed some money to keep the wheels in motion and everyone else is doing it for free.

On that particular Wednesday I was asleep at the end of the garden – my secret haven – having a crisis when the phone rang and woke me up. It was the BBC asking if I might be interested in talking to them about the reality of being a small Ltd company in Covid-19. I said yes –  and when would that be – the reply was – you will be on in 8 minutes. No time to do my hair, make up, think about what I was going to say. I gulped, dashed into the studio, turned on some lights on and asked for a sound check. The piece can be seen on my insta georgia_glynn_smith or LinkedIn site linkedin.com/posts/georgia-glynn-smith-69b1b912_we-do-need-to-be-heard-and-as-much-as-i-ugcPost-6653726122506797057-O3w0

The response over the next week was phenomenal. Not always good. A lot of people treated us all as tax evaders, fraudsters, can’t have it all your own way etc. It became very obvious to me that the general public don’t really know what it means to be a small Ltd company and the word “dividend” was making us all sound like fat cats living of investment dividends. Then it became apparent that even the MPs didn’t understand it either. It was time to educate them all. I was now receiving hundreds of emails every day from people all over the country describing their jobs and the horrific family situations they are all in. It was overwhelming. I started petitions and signed other petitions and over the next week or so it became apparent that there were a lot of us doing the same thing – and also a lot of self-employed Ltd companies. At the start the figure was 2 million of us and now it has reached 5.4 million. Those 5.4 million employ up to 13.5 million people. That’s a lot of people in a terrible situation if the small companies cannot be helped and kept afloat. I had Zoom calls with other people in the same situation and decided that we needed to show the country and the government who we really were. Normal people. I was spending long days and long nights trying to follow all the threads on 3 different social media platforms – it was a nightmare for a Virgo dyslexic brain. How to keep a database on who, what, where and why; impossible.

I spoke to a campaign leader who shared her working strategy for a successful campaign. I realised and decided that I was going to do this.

There were now many large successful campaigns going on including #ForgottenLtd. #2millionreasonswhy. #theforgottenfreelancers #notinthistogether. No one knew which petition to sign, where to get the right advice from – why would the government listen to us all. The time had come to team everyone up – create the same strong message to the government. We started with educating the public and the MPs about what it actually means to be a small Ltd company and who we actually are. Writers, comedians, kids’ magicians, hairdressers, opticians, dentists, filmmakers, scriptwriters, fashion designers, illustrators, a lot of marketing managers, camping centres, cyclist groups, restaurants, gardeners – the list went on and on.

I spoke to Change.org and asked if they could amalgamate our numbers. We needed 10,000 for the MPs to listen. It began to work. The daily pressure on the government begun to show some light. We had an early meeting in parliament. On Monday 4 May the government has now offered micro loans to Ltd companies, from £2,000 to £50,000. They will support them and we will not have to pay interest on these for 12 months. The honest reality is that few of us can afford to “borrow” any more money, especially as we don’t know when we will ever go back to work, if there is a second lockdown etc – so the campaign still continues for those who want it.

Do join us if you are in a similar situation #forgottenLtd. You can find us everywhere now – Insta, Twitter, LinkedIn – even YouTube.

Without government support for small businesses, others’ jobs may disappear if our businesses cannot survive.

If risk-takers, innovators, creators, entrepreneurs are not supported now, how can we save 5.8 million small businesses and the livelihoods of 13.2 million employees? We are asking for parity. We are asking not to be forgotten.

WHAT WE ARE CAMPAIGNING FOR

We are calling on the government to immediately:

Allow furloughed directors to continue to work: No one should be forced to abandon their businesses, nor punished for unwittingly undertaking any action that may be deemed fraudulent. We need to be in the strongest position possible to emerge from this crisis intact and to play our part in the country’s economic recovery.

Extend business support grants to all small businesses: We need support now to save and sustain our businesses.

We also call on the government to:

Protect our incomes by extending SEISS to encompass small limited company directors based on all income for the last 3 years capped at £2,500.

To include PAYE (except where already furloughed), dividends and/or income classed as repayments to a director's loan for companies not in profit

Demonstrate a plan for the sustainable future of small businesses:

we need clear guidance on what the exit strategy “could” look like and how small businesses can aim for a return to some semblance of “normal”; and

while existing support packages must be extended, we need support now and to get through the inevitable recovery process.’

If you would like to know more about the situation for small ltd companies and how you can support the campaign, please feel free to contact Georgia directly via georgia@glynnsmith.co.uk.