[Finance] Self employed to receive 80% of income from the Gov’t too

[seagurn]

So as a sole director of a ltd company and having laid of all subcontractors now, im not entitled to get anything exept universal credit. Was a shame really had enough work for the year but working in poeples homes is totally unworkable as some of the subbies rely on public transport and clients potentially put at risk of exposure as are the subcontractors. The link to ross martin was very helpfull thanks and gives me the clarity i was hoping for. Regards and stay safe.

 

[LlcoolJ]

So as a sole director of a ltd company and having laid of all subcontractors now, im not entitled to get anything exept universal credit. Was a shame really had enough work for the year but working in poeples homes is totally unworkable as some of the subbies rely on public transport and clients potentially put at risk of exposure as are the subcontractors. The link to ross martin was very helpfull thanks and gives me the clarity i was hoping for. Regards and stay safe.

Good luck mate. This is a perfect example of why people should desist with the snide, nasty "I'm alright because I'm lucky" rubbish.

 

[Nitram]

Detail - not sure if it’s been posted before

https://www.gov.uk/guidance/claim-a...ovid-19-self-employment-income-support-scheme

 

[LlcoolJ]

Standard HMRC.....

"How to apply

You cannot apply for this scheme yet."

 

[DJ NOBO]

To the clued-up bods of NSC, any answers to this? Asking for a friend ......and apologies if this is fixtured somewhere in the previous 39 pages.

“Can anyone unravel this for me? I'm self employed. Hopefully entitled to Gov help. BUT if I'm asked to do the odd shift in the next 3 months (which would equal FAR less income than I may be entitled to) - should I do them? Or would I then end up out of pocket / be penalised?”

 

[LlcoolJ]

Totally contradictory.....

"Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

have submitted your Income Tax Self Assessment tax return for the tax year 2018-19

traded in the tax year 2019-20

are trading when you apply, or would be except for COVID-19

intend to continue to trade in the tax year 2020-21

have lost trading/partnership trading profits due to COVID-19"

But then it says that you need to have submitted a 2019 return..... Impossible of you've only started trading in the past few months.

Man alive, this is going to be fun.

 

[Beach Hut]

To the clued-up bods of NSC, any answers to this? Asking for a friend ......and apologies if this is fixtured somewhere in the previous 39 pages.

“Can anyone unravel this for me? I'm self employed. Hopefully entitled to Gov help. BUT if I'm asked to do the odd shift in the next 3 months (which would equal FAR less income than I may be entitled to) - should I do them? Or would I then end up out of pocket / be penalised?”

I do not know the exact answer but I do know in the 80% employer scheme it is made very clear you cannot do other work so I would have thought it is the same rules

 

[LlcoolJ]

To the clued-up bods of NSC, any answers to this? Asking for a friend ......and apologies if this is fixtured somewhere in the previous 39 pages.

“Can anyone unravel this for me? I'm self employed. Hopefully entitled to Gov help. BUT if I'm asked to do the odd shift in the next 3 months (which would equal FAR less income than I may be entitled to) - should I do them? Or would I then end up out of pocket / be penalised?”

From what I've seen so far, the self employment compensation does NOT prevent you from working and trying to keep your business going.

Which is one of the few things in all this that's actually made sense.

 

[Bold Seagull]

I’ve always found this firm’s website a mine of free and accurate information:

https://www.rossmartin.co.uk/covid-19/4643-covid-19-company-directors-shareholders

Added to that, the very first question for one or two or three man band limited companies must shirley be asking is, is there any trade at all? If the answer is yes, it’s continuing, but on levels far reduced levels just now, I would think there’s no way owner directors could then claim they’re furloughed. If sales/services provided are genuinely zero month after month, then go on to consider the issues raised by rossmartin.

My instinct is that the government do not intend this 80% PAYE grant to subsidise the salaries of directors. Instead, at it’s heart, it exists as an alternative to making staff redundant.

That's a helpful easy to understand website.

Like illustrated in the article, I probably do have little bits to do, queries from older jobs, planning applications that might generate a query etc. I can't furlough myself and just leave the company unattended as it were. However interesting if the 'director' role of stewarding the company can be retained while the 'employee' role of actually doing some work can be furloughed.

 

[LlcoolJ]

I do not know the exact answer but I do know in the 80% employer scheme it is made very clear you cannot do other work so I would have thought it is the same rules

No it isn't the same, from what I've seen.

Need to quantify this by saying that I've not read the full biff yet......

 

[trueblue]

Good luck mate. This is a perfect example of why people should desist with the snide, nasty "I'm alright because I'm lucky" rubbish.

The type of comment I'm seeing most is 'you've reduced your National Insurance by operating through a Limited Company and now you're getting what you deserve - next to nothing'. Mainly, as far as I can make out, from smug employees now on 80% of their salary for doing eff all or well-heeled pensioners who worked in very different times and can't understand why few people can afford to have savings these days.

On the N.I. allegation, I suppose there's some merit to that although I'd never really given that aspect any thought. I was only really aware that Corporation Tax makes it a better way of operating, although the tax on dividends now levels things up a lot anyway (which I don't mind). Perhaps naively, this has always been in the hands of my (AFAIK) reputable accountant. What's the point in having one otherwise?

What those that are gloating ignore is the fact that in some industries - including mine - some clients only want to deal with limited companies - so it's not all about tax. Or not my tax, at least.

In my mind, the financial benefits of being self-employed (although technically I'm an employee of my own company, of course) are simply compensation for some of the pitfalls of the position - like suddenly having no income at all, currently forever, at 24 hours notice. Once my costs, tax and everything else are taken into account, I'm not that much better off than a sole trader. In my case, there's no cash in hand, made-up employees, exaggerated expenses or any of that stuff people accuse us all of doing. It simply wouldn't be possible to get away with it even if I was the type that wanted to.

If such a thing as a 'proper' job existed for people like me, I'd very likely jump at the opportunity for employee benefits and workers' rights. I'd consider those a more than acceptable trade-off for the relatively small reduction in earnings. But it's not realistically an option.

 

[Wrong-Direction]

To the clued-up bods of NSC, any answers to this? Asking for a friend ......and apologies if this is fixtured somewhere in the previous 39 pages.

“Can anyone unravel this for me? I'm self employed. Hopefully entitled to Gov help. BUT if I'm asked to do the odd shift in the next 3 months (which would equal FAR less income than I may be entitled to) - should I do them? Or would I then end up out of pocket / be penalised?”

Yes we're allowed to keep on working and claim, as long as its essential/ take precautions

Sent from my SM-A600FN using Tapatalk

 

[Gazwag]

The type of comment I'm seeing most is 'you've reduced your National Insurance by operating through a Limited Company and now you're getting what you deserve - next to nothing'. Mainly, as far as I can make out, from smug employees now on 80% of their salary for doing eff all or well-heeled pensioners who worked in very different times and can't understand why few people can afford to have savings these days.

On the N.I. allegation, I suppose there's some merit to that although I'd never really given that aspect any thought. I was only really aware that Corporation Tax makes it a better way of operating, although the tax on dividends now levels things up a lot anyway (which I don't mind). Perhaps naively, this has always been in the hands of my (AFAIK) reputable accountant. What's the point in having one otherwise?

What those that are gloating ignore is the fact that in some industries - including mine - some clients only want to deal with limited companies - so it's not all about tax. Or not my tax, at least.

In my mind, the financial benefits of being self-employed (although technically I'm an employee of my own company, of course) are simply compensation for some of the pitfalls of the position - like suddenly having no income at all, currently forever, at 24 hours notice. Once my costs, tax and everything else are taken into account, I'm not that much better off than a sole trader. In my case, there's no cash in hand, made-up employees, exaggerated expenses or any of that stuff people accuse us all of doing. It simply wouldn't be possible to get away with it even if I was the type that wanted to.

If such a thing as a 'proper' job existed for people like me, I'd very likely jump at the opportunity for employee benefits and workers' rights. I'd consider those a more than acceptable trade-off for the relatively small reduction in earnings. But it's not realistically an option.

Thing is now there is very little benefit if at all of working as a limited company purely as a tax exercise. I believe the biggest benefit, even more so now, is the limited liability. As long as directors haven't had to give personal guarantees you are not going to lose everything if your business goes down the pan.

 

[WATFORD zero]

From what I've seen so far, the self employment compensation does NOT prevent you from working and trying to keep your business going.

Which is one of the few things in all this that's actually made sense.

That's also my understanding. It's simply too complicated to try and record and manage which self-employed are doing what, as there will be anything from not working at all to unchanged, and trying to do this after the event would simply encourage people to lessen their declared incomes (as if such a thing would happen ).

So, in certain circumstances, some self-employed may continue to work full time and claim the 80% as long as they 'have lost trading/partnership trading profits due to COVID-19' . (I believe)

 

[LlcoolJ]

The type of comment I'm seeing most is 'you've reduced your National Insurance by operating through a Limited Company and now you're getting what you deserve - next to nothing'. Mainly, as far as I can make out, from smug employees now on 80% of their salary for doing eff all or well-heeled pensioners who worked in very different times and can't understand why few people can afford to have savings these days.

On the N.I. allegation, I suppose there's some merit to that although I'd never really given that aspect any thought. I was only really aware that Corporation Tax makes it a better way of operating, although the tax on dividends now levels things up a lot anyway (which I don't mind). Perhaps naively, this has always been in the hands of my (AFAIK) reputable accountant. What's the point in having one otherwise?

What those that are gloating ignore is the fact that in some industries - including mine - some clients only want to deal with limited companies - so it's not all about tax. Or not my tax, at least.

In my mind, the financial benefits of being self-employed (although technically I'm an employee of my own company, of course) are simply compensation for some of the pitfalls of the position - like suddenly having no income at all, currently forever, at 24 hours notice. Once my costs, tax and everything else are taken into account, I'm not that much better off than a sole trader. In my case, there's no cash in hand, made-up employees, exaggerated expenses or any of that stuff people accuse us all of doing. It simply wouldn't be possible to get away with it even if I was the type that wanted to.

If such a thing as a 'proper' job existed for people like me, I'd very likely jump at the opportunity for employee benefits and workers' rights. I'd consider those a more than acceptable trade-off for the relatively small reduction in earnings. But it's not realistically an option.

Yep. It's a real shame that some people, a lot of people, have zero idea about this stuff but still feel qualified to have a vocal and often offensive opinion.

Hope you get through this ok btw.

 

[LlcoolJ]

Thing is now there is very little benefit if at all of working as a limited company purely as a tax exercise. I believe the biggest benefit, even more so now, is the limited liability. As long as directors haven't had to give personal guarantees you are not going to lose everything if your business goes down the pan.

Bang on.

It's the main reason why I often advise clients to go down that route.

Should they be unfortunate enough to engage a dodgy customer who tries to sue them through no fault of their own, they have another level of cover.

 

[Silverhatch]

Can anyone shed any light on this situation. My lad has been registered in CIS since June 2019. Has submitted 37 invoices to his company/contractor and paid weekly tax deductions. His company/contractor is not working. He will get a tax rebate by applying thru CIS/ HMRC portal at year end (few days away). BUT - will he be able to claim against a govt relief scheme? Construction Industry Scheme is HMRC driven, he’s registered, has paid tax and HMRC know his earnings

 

[LlcoolJ]

Can anyone shed any light on this situation. My lad has been registered in CIS since June 2019. Has submitted 37 invoices to his company/contractor and paid weekly tax deductions. His company/contractor is not working. He will get a tax rebate by applying thru CIS/ HMRC portal at year end (few days away). BUT - will he be able to claim against a govt relief scheme? Construction Industry Scheme is HMRC driven, he’s registered, has paid tax and HMRC know his earnings

See above mate.

It's very complicated. Clearly he'll get the tax back but as for qualifying for compensation, nobody knows yet.

The original statement was that people who have only gone self employed in 19/20 wouldn't qualify (so have to go down the UC route).

But the site now says that they are eligible to apply.

But also that you have to have completed a 2019 tax return. Which is impossible if you only started trading in this tax year.

Clear as mud.

 

[beorhthelm]

My instinct is that the government do not intend this 80% PAYE grant to subsidise the salaries of directors. Instead, at it’s heart, it exists as an alternative to making staff redundant.

its HMRC, they want to show those being teax efficient why they shouldnt have been. directors on PAYE would be covered in the 80%.

 

[Bold Seagull]

its HMRC, they want to show those being teax efficient why they shouldnt have been. directors on PAYE would be covered in the 80%.

Read the [MENTION=21158]Weststander[/MENTION] links to the rossmartin website and realise it is really not that simple. The devil in the detail is that a sole director as the 1 person employee of their company may not be able to furlough themselves for the 80% of their PAYE because effectively no one would then be in charge of the business entity. Whether there is room to say your role as a director to deal with the administrative side of the limited company can be retained, while your role as the company sole employee can be furloughed isn't clear.

If HMRC want to show those legally following the long established tax rules that they shouldn't be, all they have to do is change the rules. Statements like yours above have been shown time and time again on this thread to be simply born out of at best misunderstanding, and at worse just ignorance.