Coronavirus self employed payment

[Baddegg]

I don't suppose calculations and payments to 5m people through a system that doesn't already exist can be fulfilled next week.

The people doing it need the same pressures as us lot Andy....no finish no pay....it’s amazing the results that gets ?
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edit.... Mortality rate for adults below 60 = 0.4% (0.004) NOT 4%.

1 - (0.6 x 0.004) = 0.9976

A 99.76% chance! Much happier now

Drink more beer @happyhippydad!....that’s worse than the adiabatic ?

 

[snowhead]

Or why do we need to wait till June that puzzles me, the reason they have not got any staff all automated.

There isn't a magic button that someone can press that;

Searches HMRC records for the last 3 years.
Eliminate the higher earners
Eliminate the Also employed
Averages the Profit over the last 3 years of records

And a whole lot more.

They've got to set up the system to do it and test it to make sure it's 100%
At the same time as they are doing all the other new systems for payments.

 

[plugsandsparks]

I think the reason the banks maybe pushing their own products for loans is that the Cbils scheme only guarantees 80% by Gov, all setup costs and early redemption is swallowed by the bank. However if they offer their own standard terms, you pay setup, interest and early redemtpion... mmmm- I think i may give it a go and see what happens

 

[Zerax]

SC, has you are aware some self peaple can't wait till June, it's diffrant when they tax man we want your monies that you owe us come Jan. Or why do we need to wait till June that puzzles me, the reason they have not got any staff all automated.

Buzz... they have to write software to analyse the last 3 years tax returns... or 2 or 1 or even the 1 that has yet to be submitted (they're allowing 4 weeks to get last years late return in). That software must be specified, written and tested.... and it's civil servants doing that... they don't work at the same pace we do !

 

[ipf]

edit.... Mortality rate for adults below 60 = 0.4% (0.004) NOT 4%.

1 - (0.6 x 0.004) = 0.9976

A 99.76% chance! Much happier now

Phew!....Had me worried with that previous post, at my age.

 

[pirate]

It's going to take time to sort out these payments, that's for sure.
What I don't understand is how they calculate the limit of earnings over which you get nothing. Just because someone earns over, say, £50k, doesn't mean they are able to support themselves and their family indefinitely. They should at least get the level of payment that is applicable to someone who earns £49k. Most people live up to their income, that's how life is, unless you are mega-rich and have masses of disposable income and savings.

A single person earning £49k will probably have a much lower level of essential expenditure compared with a person who has a family of four to support and who may earn much less.

It is a matter of fact that no tax system can be absolutely fair to everyone, thus no system of handouts/relief can be either. However, some of the immediate stress could be relieved by an advance payment which would be subject to review in due course. I don't pretend to know the answer, but if every self-employed taxpayer who made a return in january received a payment of £1k as soon as possible, it may make life less harsh for many. Certainly, many people i know have "spiked" the bills meantime, preferring to buy food than pay the gas bill...the repercussions for this pandemic will be felt for many years.

 

[Alan Smart]

It's going to take time to sort out these payments, that's for sure.
What I don't understand is how they calculate the limit of earnings over which you get nothing. Just because someone earns over, say, £50k, doesn't mean they are able to support themselves and their family indefinitely. They should at least get the level of payment that is applicable to someone who earns £49k. Most people live up to their income, that's how life is, unless you are mega-rich and have masses of disposable income and savings.

A single person earning £49k will probably have a much lower level of essential expenditure compared with a person who has a family of four to support and who may earn much less.

It is a matter of fact that no tax system can be absolutely fair to everyone, thus no system of handouts/relief can be either. However, some of the immediate stress could be relieved by an advance payment which would be subject to review in due course. I don't pretend to know the answer, but if every self-employed taxpayer who made a return in january received a payment of £1k as soon as possible, it may make life less harsh for many. Certainly, many people i know have "spiked" the bills meantime, preferring to buy food than pay the gas bill...the repercussions for this pandemic will be felt for many years.

They have not taken into account the running of a small business, like advertising, cost of van payments part p cost, liability insurance, it’s not comparable to paye.

 

[Baddegg]

They have not taken into account the running of a small business, like advertising, cost of van payments part p cost, liability insurance, it’s not comparable to paye.

I sure a phone call to each of those things could result in temporary suspension of payments, none of which you’ll need if you stop working....this is new territory for everyone...

 

[davesparks]

They have not taken into account the running of a small business, like advertising, cost of van payments part p cost, liability insurance, it’s not comparable to paye.

Don't advertise or pay the part P registration whilst you cannot work.
Speak to the relevant people about your insurance and van payments.

There is a complete package of measures for businesses seperate from the measures being put in place to support personal income.

 

[Baddegg]

Havnt read it al but I’ll look forward to holidays and sick pay in the future then ?

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

 

[snowhead]

It's to cover sick pay at the same rate as PAYE, it doesn't cover Holidays, that's the employers responsibility

 

[happysteve]

To work out the effect of this on your "usual" take home (drawings), you need to work out what fraction of your expenses will still continue, and what won't. You also need to know what fraction your usual expenses are compared with your profits (profits + expenses = turnover).

Say your profit is £25k, and your usual expenses are £16k. Which means your turnover - usual total income, would be £41k.

Of those £16k expenses, £11k is stock, and £1k is advertising (which you're not going be be spending on at the moment). £12k out of £16k is 75%, or, as a fraction, 0.75 (12/16).

You will be paid 80% of your profits, which is 0.8 x £25k, which is £20k. You still have to pay your unavoidable expenses, which is £16k - £12k, which is £4k. Which leaves you with £16k, which is 64% of your usual take-home.

If you know your profit (in £££) and you know your expenses that will still need to continue (in £££), then it's relatively simple: new take-home, "y" is:

y = (0.8 x profit) minus (expenses that need to continue).

As a percentage of your usual take-home, this is:

(y / profit) * 100

Plugging in the numbers for my own situation, I'm at about 52% in theory; although because my business has been growing over the past 3 years, my actual percentage is considerably lower, because the number they will use for "profit" is the average of those 3 years, and is a lot lower than it is currently. But I'll take that.

For some folk, their percentage of their expenses that they can't stop will be much higher. As others have said, reduce your unnecessary expenses as much as you can. This is the same whether you're self-employed or not. On the other hand, I'd encourage you to carry on with your charitable giving as much as you can, as the poorest and those most in need are going to suffer the most.

Hope the maths bit was useful, anyway.