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[Finance] Self employed to receive 80% of income from the Gov’t too
- Thread starter Weststander
- Start date
I guess that comes under the category of you can't have it both ways, I've a few mates who've always ribbed me about paying taxes and ensuring me there are ways and means of avoiding it. To me if you earn it you've got to contribute and the here and now is a classic example, sorry.
And there will be a very important lesson...
Hardly a 'pop', merely an observation.
Thanks anyway.
Oh ok if you say so.
I find people having "merely an observation" about the self employed are usually the ones that have never had their own business.
- Jul 10, 2003
- 27,786
Did your Dad employ you for the previous 2.25 years ? If so, I would imagine they will either take the income he paid you + your 9 months to calculate it, or just base it on your 9 months submitted. I remember years ago, I did Jury Service soon after starting self employment and they simply took my self employed earnings to date as a basis.
*edit*
As I understood it, the government still can't decide what to do about self-employed who are still working Part/Full time and it may hold this up a bit. (Although, once resolved, I still expect this to happen)
A lot of nonsense and misinformation on this thread unfortunately. People need facts at the moment not "Oh look they've sorted it!". They haven't. This is no way political btw.
From gov.uk today re the 80% for employees........
"HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers."
There is no money yet.
The situ for the self employed or those running their own companies is FAR more complicated and unfortunately (as I deal with them on a daily basis) I have zero faith that HMRC will get this in any way right.
I sincerely hope that I'm proved wrong but please don't start backslapping anyone when NOTHING has actually happened yet with regard to payments to employers, let alone the self employed.
From gov.uk today re the 80% for employees........
"HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers."
There is no money yet.
The situ for the self employed or those running their own companies is FAR more complicated and unfortunately (as I deal with them on a daily basis) I have zero faith that HMRC will get this in any way right.
I sincerely hope that I'm proved wrong but please don't start backslapping anyone when NOTHING has actually happened yet with regard to payments to employers, let alone the self employed.
Wrong-Direction
Well-known member
- Mar 10, 2013
- 13,640
I think by the time they get it sorted things will probably be back to normal and they'll hope everyone that has survived will just get on with it and screw everyone that went under
Sent from my SM-A600FN using Tapatalk
Is it PotG?
Thrifty non-licker
Alas that could hardly be further from the truth. I know only too well the pros, and cons, of such a situation.
HMRC is a total mess. It wasn't great already, but 10 years+ of cuts have decimated it. All the really clever people have gone to work for private accountancy firms and the majority who are left are massively overworked and underpaid.
It is the last organisation that I would want in charge of this situation. It barely functions as it is.
If I were the chancellor I would hand it over to the actual tax experts to formulate a plan and keep HMRC as far away from any decisions / implementation plans as possible.
Never fancied the risk of financial ups and downs of freelance work, lucrative though it is when you are working (Compared to working for a company).
Sounds like many freelancers will do very tidily out of the government’s decision to take the hit, especially those that didn’t save for slow periods.
And once this has all blown over, those contracts which are currently shelved, will be brought back into play.
Could work out pretty well for some.
Sounds like many freelancers will do very tidily out of the government’s decision to take the hit, especially those that didn’t save for slow periods.
And once this has all blown over, those contracts which are currently shelved, will be brought back into play.
Could work out pretty well for some.
Weststander
Well-known member
- Thread starter
- #31
It's being announced tomorrow.
The delay because unlike employees, there are several different scenarios, e.g. a recently set up sole tradership or partnership, where there've been no filed tax returns just yet. So how is their average net profit calculated, with evidence?
The delay because unlike employees, there are several different scenarios, e.g. a recently set up sole tradership or partnership, where there've been no filed tax returns just yet. So how is their average net profit calculated, with evidence?
Weststander
Well-known member
- Thread starter
- #32
The payouts to employees (through PAYE) and the self employed will start in April, hopefully early April.
COVID-19 will affect the UK for another 6 to 18 months, apparently.
I think you may well be correct. Universal credit claims aside.
I would immediately put through legislation to pay those who submit a Self Assessment return the same 80% of net income (profit / salary / dividends etc) up to the same limit. Based on the last submitted tax return.
That is simple and fair. And yes, if you have declared as low an income as possible then you get less. Not an issue.
It will be interesting to see how they actually calculate the 80% on wages as well. What period it is based on etc. I have already heard about people thinking they can scam it by paying themselves a bigger wage this month through their own companies....... LOL.
Either way, it will not be fair. If you've just got a new job on £30k will you get £2500 a month when a guy who's been earning £30k a year being self employed for 20 years gets peanuts? Hmmm.....
Precisely. E.g. A mate of mine who is a solicitor and went self employed in January..........?
Official Old Man
Uckfield Seagull
Blood, stone & HMRC.
It just isn't going to work, either self employed or this 80% wages.
I understand wages for staff will be based on their February pay slip. As an example, £1000 would be £800. BUT. Do I pay my staff, for instance, £8 an hour instead of £10 thus less tax, NI and pension due? Or £10 an hour but pay them 80% of net wages?
My staff are paid weekly and so I've until Sunday to find out.
As for self employed, well I wont hold my breath.
It just isn't going to work, either self employed or this 80% wages.
I understand wages for staff will be based on their February pay slip. As an example, £1000 would be £800. BUT. Do I pay my staff, for instance, £8 an hour instead of £10 thus less tax, NI and pension due? Or £10 an hour but pay them 80% of net wages?
My staff are paid weekly and so I've until Sunday to find out.
As for self employed, well I wont hold my breath.
Weststander
Well-known member
- Thread starter
- #36
It will be based on reported profit.
Turnover would be ridiculous, in effect paying e.g. builders the equivalent their materials, plant hire and fuel, when the business related element of those costs are zero as they're not working. Potentially giving them a far larger profit than when they were working, paid for by the state.
Weststander
Well-known member
- Thread starter
- #37
Employees - you can forget about hours and hourly rate. it's simpler than that. If their typical gross wages are £1,000 per month, the government are paying you to pay them £800, but you can top up to 100% if you wish.
Self employed - the government aren't going to let 5 million families go bankrupt. Political suicide for starters.
No one, even NSC's experts knew that COVID-19 was going to escalate to this, two or three weeks ago 99% of us were going about our normal and business lives. Complex software is being designed to operate PAYE in reverse.
Weststander
Well-known member
- Thread starter
- #38
I think we should have confidence on that very last point. The simpler employees announcement was only made last Friday. The self employed, who did the honest thing and declared their true profits in their profits in their tax returns, will get 80% of profits paid monthly up to the cap. Not sure if through HMRC or the benefits system.
The self employed shop keepers, builders, takeaways and tax drivers, who defrauded the nation, by suppressing declared income to give negligible taxable profits over recent years, are up sh*t creek. You reap what you sow.
LamieRobertson
Not awoke
Profit before buying capital equipment?
Blue Valkyrie
Not seen such Bravery!
They have already thought of that and for people on variable hours they will use the February figures ( source : radio 4 expert, last Saturday ). So, it'll be similar.