Being self employed and the coronavirus

[Taylortwocities]

This is when some self-employed people start regretting trousering cash payments rather than putting it through the books!

 

[Baddegg]

Havnt read it all but looking forward to holiday and sick pay ?

Self-employed face tax hike after £9bn bailout — Yahoo Finance UK

Chancellor Rishi Sunak hinted that national insurance contributions by the self-employed could increase after the coronavirus crisis pases.

apple.news

 

[David Prosser]

Havnt read it all but looking forward to holiday and sick pay ?

Self-employed face tax hike after £9bn bailout — Yahoo Finance UK

Chancellor Rishi Sunak hinted that national insurance contributions by the self-employed could increase after the coronavirus crisis pases.

apple.news

Interesting to see how holiday pay would be worked out. I don't think £96 SSP would make much diffrence.

 

[davesparks]

it's not just 80% of wages we need. we still have overheads to pay, even if only road tax,insurances, phone. how can govt. expect us to survive if we can't keep the business overheads paid? van sitting outside not moving still costs, even worse if it's on finance or lease.

If you don't like the 80% offered then you don't have to take it, you can take 0% if you prefer.

I'm surprised, and happy, that they are offering the self employed anything at all.

When I chose to go self employed I knew that it meant I would no longer get any holiday pay, sick pay, employers pension or any other form of benefit or support. I made the decision accepting that I was on my own and fully aware that should anything happen to prevent me from working then I would not see a penny.

 

[telectrix]

agree with you dave about the pitfalls of self employed, , but employed guys are getting their 80% wages paid NOW. we have to wait till June to even apply.

 

[Zerax]

I have to say... that the rules for claiming expenses under Schedule D (Self Employed) are somewhat overdue for revision. Even taking into account the benefits of employment (SSP, Holiday Pay, Pension etc.) the tax paid by the self employed is far lower than the employed. So it's not entirely surprising that the government might take this opportunity to adjust things.

 

[davesparks]

agree with you dave about the pitfalls of self employed, , but employed guys are getting their 80% wages paid NOW. we have to wait till June to even apply.

Yes employed people are getting paid now because their employers are paying them, the employers aren't receiving the money from the government yet as the scheme has only just opened for applications.

The system for processing self employed peoples applications is rapidly being created at the moment, it doesn't even exist yet. We don't have to wait until June to apply, the latest information from Hmrc is that they will start taking applications in mid May and payments will be in June.

Yes it would be a lot better if we could get the self employed grant now, but that's just not possible when no system of tracing, calculating what should be paid or paying money to all self employed people exists yet.

The only way the government could have paid employed and self employed at the same time would be to delay paying the employed people until June.
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I have to say... that the rules for claiming expenses under Schedule D (Self Employed) are somewhat overdue for revision. Even taking into account the benefits of employment (SSP, Holiday Pay, Pension etc.) the tax paid by the self employed is far lower than the employed. So it's not entirely surprising that the government might take this opportunity to adjust things.

If the tax paid is brought in to line then there will be little point in being self employed. A lot of self employed people will probably just seek employment or claim benefits instead.

 

[Risteard]

If you don't like the 80% offered then you don't have to take it, you can take 0% if you prefer.

I'm surprised, and happy, that they are offering the self employed anything at all.

When I chose to go self employed I knew that it meant I would no longer get any holiday pay, sick pay, employers pension or any other form of benefit or support. I made the decision accepting that I was on my own and fully aware that should anything happen to prevent me from working then I would not see a penny.

With respect it's the state which has essentially ensured that everyone earns no money through deliberate policy decisions, so their culpability in this matter is total. So it's a bit of a cop-out to suggest that they are not liable for the money.

And the fact that they want people to wait months and months to get it is criminal.
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The only way the government could have paid employed and self employed at the same time would be to delay paying the employed people until June.

I disagree. They could have paid fixed amounts to everyone. If they so desired then they could claw back anything they deemed unnecessary after the fact.

Complex and convoluted systems were not the answer.

Money IMMEDIATELY was the answer. That's my very strong opinion on that. The governmental response to this was wholly inadequate and lacks any sense of urgency.

Constantly being hit with bank charges and card fees due to this lack of urgency and abject failure to get money to people NOW.

 

[telectrix]

I have to say... that the rules for claiming expenses under Schedule D (Self Employed) are somewhat overdue for revision. Even taking into account the benefits of employment (SSP, Holiday Pay, Pension etc.) the tax paid by the self employed is far lower than the employed. So it's not entirely surprising that the government might take this opportunity to adjust things.

how do the self-employed pay less tax? we pay 20% of all earning above the threshold, same as employed guys. OK there are a few perks and fiddles (the odd £50 here and there for cash), but nothing at the scale of bosses of big industries.

 

[davesparks]

With respect it's the state which has essentially ensured that everyone earns no money through deliberate policy decisions, so their culpability in this matter is total. So it's a bit of a cop-out to suggest that they are not liable for the money.

And the fact that they want people to wait months and months to get it is criminal.

I disagree. They could have paid fixed amounts to everyone. If they so desired then they could claw back anything they deemed unnecessary after the fact.

Complex and convoluted systems were not the answer.

Money IMMEDIATELY was the answer. That's my very strong opinion on that. The governmental response to this was wholly inadequate and lacks any sense of urgency.

Constantly being hit with bank charges and card fees due to this lack of urgency and abject failure to get money to people NOW.

Nature, through the medium of the SARS-COV-2 virus has ensured that people are earning no, or a lot less, money at the moment. The government have put in place their policies as a reaction to the spread of that virus.
The have tried, as far as I can tell, to achieve the best balance they can between economic impact and reducing the spread and impact of the virus.

How on earth could the government give a fixed amount to every person? how would that be administered, they cant just send an envelope of cash to every postal address in the UK.

The government response seems to have a lot of urgency to it, processes which could normally take years are taking days/weeks now.

the universal credit system is available to everyone, including self employed people, to get access to money to assist with making ends meet at this time. the application is a simple online process and they call you to discuss it as soon as they can, most of the usual restrictions have been lifted and you can get an advance on the payment within a couple of weeks of application.

This is a tough time for all of us, banks, building societies and other lenders are open to discussions with anyone struggling to make their payments, commercial and residential landlords are giving rent reductions or holidays. Small businesses are getting grants to help keep them running.
There is a lot happening to support people at the moment.


And if your business continuity plan has not made any provision for supporting your business through a loss of the ability to trade for a couple of months then it is your failing, not the government's.

 

[pirate]

Basically, on the tax question, we all pay far more than we are led to believe.
I use the example of a chap getting a payment of £100 one day. A bad day for him, he usually earns much more,but he is in a higher tax bracket...
thus, £100 less income tax leaves him with £60. He goes to the filling station and buys some fuel (more tax) a packet of smokes (more tax) a bottle of gin (more tax) and that's his £100 gone. Not a perfect example, but add in NI and IPT and VAT and you will find, depending on your lifestyle, that you give back such a lot in taxes that you wonder why you bother...
I worked out, a few years ago, that when I took all the taxes i paid into account, including airport taxes, and all the others above, my personal tax rate was 88%.
Now,of course we all have to pay VAT and income tax and others, but when you boil it all down, we need to pay these levels to run this country. However, I suspect there is so much wasted tax revenue that goes on government departments with little purpose, inflated salaries to useless quangos, massive amounts wasted on the military procurement and nuclear deterrent and so on, if we keep on doing this we will end up like Italy...
Happily for me, I am now retired, living meagerly by some standards, but managing fine. There are so many out there who are struggling right now, and help is not at hand at all, for immediate need.
All this rambling is simply to highlight that in the current crisis we may have to carry out an enormous re-evaluation of how this country is run. Don't just heave a sigh of relief when we can get back to work and forget about the privation as soon as the cash starts to flow gain...no, plan ahead, because this will happen again.
My daughter asked me if she should apply for a "mortgage holiday". She took my advice some time ago, and saved up 3 months' mortgage payments, against a situation where she was made redundant, which happened just before last Christmas, and also for the possibility that she hated her job so much she had to walk out (something I have done before).
Armed with that "buffer" she was asking what to do now, and i told her to apply for the "holiday" because if this gets much worse, having money in the bank, cash, will be critical. The banks will survive, because the government will support them, and the mortgage holiday is just a deferred payment scheme...3 months on a 25 year loan is nothing.
Nobody supported me during the 2008 crisis. I lost 75% of my business then, took no salary for months in order to keep my staff in a job, used savings and other income to keep going, and ravaged my pension funds as a result. Don't regret it, but it gave me an experience to remember and to plan for the future.
My only lasting regret is that Fred Goodwin and his ilk never got sent to prison.
This crisis is "blameless" compared with 2008, but we must all take time now to re-evaluate our situation. Only pressure from the general public will change things, so we must take the longer term view and assess what really matters...anything extra is a bonus.
Rant over.
On carrying out non-essential work...I went to a house last week, as previously mentioned, to fix the plumbing. No hot or cold to the bathroom or utility room, washing machine etc. Not essential, as they have another bathroom, essential because all the incoming mains had to be switched off, so effectively no cold supply, so no heating, no toilet, no way to wash clothes. My view, and yours too, i am sure...essential.
Yesterday, I changed a lamp in an outside fitting above lady's front door. Essential? For her, being elderly, possibly, as she likes to have light there. Not essential, but it involved me unscrewing the front plate with the glass in it, replacing the lamp, screwing it back and going home. Danger level?
Zero, in my opinion. It's all about assessing the job, and being sensible. If I get the assessment wrong in someone's opinion, well, who is to say that their opinion is better than mine...as the famous line went
"opinions are like assholes...everybody got one"
Finally, folks...I too have tried the online grocery services, and frankly to wait 2 weeks for stuff that will be right on its sell by date is just stupid. I queue if I have to, but pick my times carefully. Sunday, mid-afternoon is best for me, and avoiding tesco and shopping in my local village is stress-free and rewarding, for me, and for my local shopkeepers. I, for one, will support those local people long after this crisis is over, despite the higher cost. After all, they came to my rescue, so to speak, and you can't forget those who got you through...
oh...btw, that Lego tower is awesome!

 

[Risteard]

Nature, through the medium of the SARS-COV-2 virus has ensured that people are earning no, or a lot less, money at the moment.

I disagree. It is the lockdown approach which has caused this - not the virus. In other words political policy has caused it.

How on earth could the government give a fixed amount to every person? how would that be administered, they cant just send an envelope of cash to every postal address in the UK.

Very easily. In fact so easily that many other countries have adopted this approach. It can easily be dealt with through the benefits system as an example.

the universal credit system is available to everyone, including self employed people, to get access to money to assist with making ends meet at this time.

Not true. As my wife works I have no entitlement to anything in terms of Universal Credit. Not so universal after all, is it?

And if your business continuity plan has not made any provision for supporting your business through a loss of the ability to trade for a couple of months then it is your failing, not the government's.

I cannot keep money aside on the assumption that a government will overstep its authority to the extent of ordering me to close despite having plenty of work available to do for an indeterminate length of time. How could it possibly be reasonable to expect anyone to plan for that? And the similar actions of another government have also put Debenhams into liquidation here which will result in a huge loss of work.

Lockdown is an abject failure of policy and based on highly questionable "science". There is no doubt in my mind that these types of response will lead to more deaths than COVID-19. (There is also little evidence that they will reduce the COVID-19 deaths either.) And judging deaths with COVID-19 as deaths by COVID-19 is inherently dishonest. And that's not even getting into those who weren't tested but were assumed to have COVID-19 being thrown into the mix with these figures.

 

[davesparks]

Basically, on the tax question, we all pay far more than we are led to believe.
I use the example of a chap getting a payment of £100 one day. A bad day for him, he usually earns much more,but he is in a higher tax bracket...
thus, £100 less income tax leaves him with £60. He goes to the filling station and buys some fuel (more tax) a packet of smokes (more tax) a bottle of gin (more tax) and that's his £100 gone. Not a perfect example, but add in NI and IPT and VAT and you will find, depending on your lifestyle, that you give back such a lot in taxes that you wonder why you bother...

Only income which falls in to the higher tax bracket will be taxed at the higher rate. He wi still have his tax free allowance, and pay the lower tax rate on his earnings between the upper and lower limits.
Fuel costs are unavoidable and the tax on them.
However cigarettes and alcohol are voluntary purchases, not necessities for life (cigarettes are somewhat the opposite) and we are well aware of how much tax we will be paying on them before we choose to buy them.

 

[Taylortwocities]

The thing (I think) you are forgetting is the “tax” that is laughing called National Insurance. Self employed pay way less NI than a salaried PAYE employee. Expect this to change once we have dug ourselves out of this mess.

 

[davesparks]

I disagree. It is the lockdown approach which has caused this - not the virus. In other words political policy has caused it.


Very easily. In fact so easily that many other countries have adopted this approach. It can easily be dealt with through the benefits system as an example.


Not true. As my wife works I have no entitlement to anything in terms of Universal Credit. Not so universal after all, is it?


I cannot keep money aside on the assumption that a government will overstep its authority to the extent of ordering me to close despite having plenty of work available to do for an indeterminate length of time. How could it possibly be reasonable to expect anyone to plan for that? And the similar actions of another government have also put Debenhams into liquidation here which will result in a huge loss of work.

Lockdown is an abject failure of policy and based on highly questionable "science". There is no doubt in my mind that these types of response will lead to more deaths than COVID-19. (There is also little evidence that they will reduce the COVID-19 deaths either.) And judging deaths with COVID-19 as deaths by COVID-19 is inherently dishonest. And that's not even getting into those who weren't tested but were assumed to have COVID-19 being thrown into the mix with these figures.

Without tbe lockdown approach many more people may well be dead by now, you are I may have died.

To deal with it through the benefits system you would need everybody in the country registered in to the benefits system to start with, which will probably take just as long to set up as the systems they are putting in place.

If your wife's income is sufficient to cover your living expenses then no you will not receive anything from universal credit, but you don't need to because you hav eher income to support you.

What is your business continuity plan for such a situation then? Not for this exact situation but generally for fire, flood, personal injury, civil unrest and all of the other things that could affect your ability to carry out your business for a couple of months?

 

[Risteard]

Without tbe lockdown approach many more people may well be dead by now, you are I may have died.

That is not a universally-accepted view though. It is merely one view - and the one which has received backing of many governments. And it completely ignores the effects of the lockdown, which will lead to excess deaths in and of itself. This is undeniable.

 

[davesparks]

That is not a universally-accepted view though. It is merely one view - and the one which has received backing of many governments. And it completely ignores the effects of the lockdown, which will lead to excess deaths in and of itself. This is undeniable.

No view will be universally accepted, nor will any scientific theory, just look at those who believe the earth is flat and the theory of gravity is wrong because it is 'just a theory'

Science has done the best it can to model the possible outcomes and come up with at strategy that works the best in their simulations/predictions. It won't be 100% the bets thing to do because they won't know that until after the event has happened.

How is lockdown leading to excess deaths?

I don't believe the government is ignoring the effects of the lockdown, I think they are well aware of them

 

[Risteard]

How is lockdown leading to excess deaths?

Do you know the effects of a Depression?

Do you know how many suicides; lost years due to ill-health etc. were there from the recent recession?

Also lost tax revenue for the healthcare system etc. They are already talking about on average losing 3 months of life for every member of the population. As the depression escalates that too will escalate.

There will be untold deaths as a result of this. But they won't be as visible in the news sadly.

 

[davesparks]

Do you know the effects of a Depression?

Do you know how many suicides; lost years due to ill-health etc. were there from the recent recession?

Also lost tax revenue for the healthcare system etc. They are already talking about on average losing 3 months of life for every member of the population. As the depression escalates that too will escalate.

There will be untold deaths as a result of this. But they won't be as visible in the news sadly.

Yes I know the effects of depression very well, along with the other mental illnesses I suffer.

This doesn't really answer how the lock down is leading to excess deaths.
If there was no lockdown the pandemic would still be happening and more people would catch the virus.
This will also lead to an increase in depression, suicide, significantly increased stress, higher stress on the health are system.

You can't say that the lockdown is the only thing that could cause an excess of deaths not directly related to the virus.

 

[pirate]

I fully accept what you say davesparks, it was simply an example for illustration purposes. However, when i was working and paying 40% every £1 above the threshold was taxed at that rate. I simply intended to show the sort of actual top rate that might be paid by Joe Public, and that includes "luxury" items like tobacco and alcohol, which are voluntary purchases.
I also stand by the fact that when I was a consumer of tobacco and alcohol, i was always happy that i contributed massively to the Treasury to help my fellow citizens!
As for your comment about failing to provide for the possibility of a couple of months not trading, yes it is not the government's fault...we all have to make some provision for that if we can...hence my exhortation to my daughter to have 3 months' mortgage payments in a separate account...but, sadly, the reality is that not everyone can do that. The reasons are many and varied, but whatever they are, it's just not feasible for the vast majority, I believe.
I will bore you with another thought. In years gone by, the banks paid interest. Now, they don't. Ok, they do, but at insulting rates. What has happened to the interest they used to pay? They claim it has disappeared on the money they make, so we have to suffer. Not seen too many banks suffering recently...
my bank sent me a letter recently, highlighting the fact that with rates being so low, due to the Base rate being lowered, they were cutting the interest rates on 2 of my accounts. One account currently pays 0.05% ( a paltry sum anyway) and this is being cut to 0.01%...so in real money terms, not a lot, but percentage wise quite a big cut. The other one currently basks in a huge 0.10%...which will become also 0.01%...a huge cut percentage wise. In money to spend, it's nothing because i keep very little in those accounts, but look back a few years, no, decades ,when you could get 8% on bank interest and people relied on that on their savings to live in retirement...well, we've come a long way, and it's not a good way.
The reality is that for many reasons folks live up to their incomes in a way that was unthinkable a few decades ago, and that led to folks having it all...provided the cash kept coming in to service the borrowings that they were enticed to take...and that has become the norm, sadly. The winners?
The banks. Always. We have become the slaves.