Help for self employed

[fundy]

I’m not for one minute saying you have it easy or it’s simple, just these are the pitfalls (hazards) you had to consider when going down your chosen route.

Given the issues you and others describe plus what Fundy has posted previously PAYE seems a lot more secure.

It is the more secure route, certainly doesnt make it the best route for some though. For most its quite clear which is the right option but there is a grey area in the middle where it becomes a choice. Its certainly shifting towards PAYE for a lot lately on the way they have been treated through Covid and also with tax and law changes and some are rightly feeling as though they are being hard done by

 

[ColchesterFC]

Thankfully I never had the worry, but, surely holidays/leave etc is factored when you plan or agree to your workload, ie, Colchester does it for 26 weeks.

Or sometimes 30.

 

[road2ruin]

PAYE seems a lot more secure.

Until you get the meeting called to discuss the companies numbers for the quarter and that it's likely they're going to make at least one round of redundancies. You have no control over if/when this will come and whether your number will be up! I, on the other hand, can see what the bank account has in it, know how long I can continue should the work suddenly disappear and so will see whatever happens coming from a longer way off.

 

[Imurg]

Imagine getting £2000 one month and then £1000 the next but still having all the same bills to pay.

Gets a bit like that in driving instruction too.
I used to teach twins, 2 hours a week each, nice steady 100 quid just from them.
They went to Ibiza for a month one Summer - bang, that's a 100 quid a week pay cut.
And when 3 or 4 of them do it the numbers mount up.

 

[Lord Tyrion]

I’m not for one minute saying you have it easy or it’s simple, just these are the pitfalls (hazards) you had to consider when going down your chosen route.

Given the issues you and others describe plus what Fundy has posted previously PAYE seems a lot more secure.

Presumably you mean work for someone else rather than be self employed? Pluses and minuses for both. The days of job for life, outside of the public sector, are long gone so security is less of a factor. Being employed certainly does offer many securities and fewer worries but you then lack the control that you have over self employment.

If I could start again I'd try to get inside a council, local govt. I never thought I'd of said that back in the day, hence why I didn't ?

 

[DannyOT]

I do feel for directors / employees paid predominantly through dividends; there is a definite assumption that anyone in the role of director has plenty of cash reserves and is rolling in money.

I think part of the reason that no scheme exists for directors / dividends is because of the administrative burden and 'double claim' potential. How would it be managed if you have a director who pays themselves through both PAYE and dividends? Would you be entitled to claim under both schemes? You could theoretically cap it at a combined maximum of £2500 per month but how do you split the divide? There's the problem of how it's paid out. If it was paid in the same way as PAYE employees, it would all be subject to income tax / NI which could cause issues down the line.

There's also the issue of people who are directors of multiple companies who would most likely be entitled to make a claim for each company. I know you can be furloughed by multiple employees under the job retention scheme but there aren't many people paid significant amounts through PAYE by 2 employers so the overall risk is much less.

I'm sure there are ways to create such a scheme but knowing how HMRC hold data, it would be an absolute nightmare to administer and potential a lot of tax at risk.

 

[hairball_89]

I've followed this thread with some interest. I'm in theatre, I'm a sound engineer. Many of my friends and colleagues have had nothing coming in since march last year, and I know we're not alone as an industry. I've been lucky because although I am self-employed and work freelance for a few bands and artists and festivals, I probably only make 10-15% of my income from freelance earnings and the vast majority as PAYE from my council owned theatre job.

The guys who have taken the time to explain their situations, and how that affects them this year and moving forwards, thank you for this. It's genuinely eye opening and certainly right now and over the last year or so, I really do not envy you at all.

 

[SwingsitlikeHogan]

I've followed this thread with some interest. I'm in theatre, I'm a sound engineer. Many of my friends and colleagues have had nothing coming in since march last year, and I know we're not alone as an industry. I've been lucky because although I am self-employed and work freelance for a few bands and artists and festivals, I probably only make 10-15% of my income from freelance earnings and the vast majority as PAYE from my council owned theatre job.

The guys who have taken the time to explain their situations, and how that affects them this year and moving forwards, thank you for this. It's genuinely eye opening and certainly right now and over the last year or so, I really do not envy you at all.

My lad’s in the same world as you - some of his income is employed through work he does in a big Sheffield nightclub but much is freelance self-employed working for tour management companies supporting bands and acts as they tour. So he’s like your colleagues for whom all income stopped dead last March. Furloughed by the nightclub until September then made redundant, but by quirk of work his freelance self employed income for 18/19 was less than his employed so didn’t qualify for any self employed grants. Is he seeing light at the end of the tunnel? Yes - but he doesn’t think it’s in June or July. Really tough in your sector...wishing you the best for a soonest reopening ....

 

[Bunkermagnet]

Being self-employed is such a nightmare. I enjoyed it for like a few months and then it just became a nightmare so now I am browsing through https://jooble.org/jobs/Glendale,-CA looking for a job because I don't want to be self-employed anymore.

How is commuting every day from the UK right now?

 

[fundy]

SEISS 4 claims open now depending on the date allocated, seem those unable to claim the first 3 grants with the early dates, some cant claim until mid next week it seems

If youre eligible you should have been messaged a claim date, if not you can find it by trying to start a claim

 

[Imurg]

Will be doing mine at about 6am tomorrow

 

[fundy]

Quick note that the 5th grant should be ready to be claimed starting next week. You shouldve had an email telling you when you will be able to claim from.

Be aware you will need to make a declaration on your turnover for the year to April 2021. If it is more than 30% less than your previous turnover then you will be get the same grant at 80%, if it not down by 30% you will only get 30%

If anyone needs help feel free to ask

https://www.gov.uk/guidance/work-out-your-turnover-so-you-can-claim-the-fifth-seiss-grant

 

[SwingsitlikeHogan]

I am not convinced these grants are and have been always used by some claimants to keep business afloat, or self-employed ticking over, as some self-employed I am aware of in receipt of grants seem to have been able to magically afford new cars, vans, extensions, hot tubs or holidays…

I would hope inland revenue are requiring evidence of what the grants are being spent on and are very watchful for fraud. There are very many for whom the grants will have been very welcome, properly used, and the only thing keeping their head above water…but there will of course be some others.

I am guessing that these grants are counted as income, and so this 5th one will be counted as income for this current tax year and so monitored in that way.

 

[fundy]

I am not convinced these grants are and have been always used by some claimants to keep business afloat, or self-employed ticking over, as some self-employed I am aware of in receipt of grants seem to have been able to magically afford new cars, vans, extensions, hot tubs or holidays…

I would hope inland revenue are requiring evidence of what the grants are being spent on and are very watchful for fraud. There are very many for whom the grants will have been very welcome, properly used, and the only thing keeping their head above water…but there will of course be some others.

I am guessing that these grants are counted as income, and so this 5th one will be counted as income for this current tax year and so monitored in that way.

This comes across as a very bitter post SILH, I think we all know why!!!! Like every area of support there will be those who abuse it and defraud it, that doesnt mean those who have had their lives and business ripped apart shouldnt receive the support they need and I will do what I can to help them.

a couple of examples of the guys Im helping with their claims; 1) A plasterer whose income went from 45k to 20k, who had his mortgage offered pulled because of it and who is struggling to stay afloat, whilst overpaying for a rental and now cant afford to buy having been saving for years to get to the position where he could having spent most of his deposit the last 18 mths, supporting his family and 3 kids, who currently is on his second period of self isolation in the last 5 weeks because one of his kids has been exposed to it at school (and hes getting no further support for these further loss of earnings). 2) A taxi driver who had gone self employed 9 mths before after being screwed over by his boss and thus hadnt submitted a tax return when the pandemic hit and who received no support for the first year and who has received a pitiful amount for the 8 mths of this year, who has been working 3 jobs for most of the time people have been moaning about not getting support or getting their family to bail them out

Yes these grants are classified as income, the first 3 go on your tax return in 20/21 the 4th and 5th ones go on your 21/22 return and are liable for national insurance and income tax. Inland revenue have no right to ask what the grants are spent on, do they ask what other people who receive support spend there money on? Or do you want them to be asking the same questions of everyone who ever receives govt support?

What would you have done differently that would have been fair to everyone and not open to fraud?

 

[SwingsitlikeHogan]

This comes across as a very bitter post SILH, I think we all know why!!!! Like every area of support there will be those who abuse it and defraud it, that doesnt mean those who have had their lives and business ripped apart shouldnt receive the support they need and I will do what I can to help them.

a couple of examples of the guys Im helping with their claims; 1) A plasterer whose income went from 45k to 20k, who had his mortgage offered pulled because of it and who is struggling to stay afloat, whilst overpaying for a rental and now cant afford to buy having been saving for years to get to the position where he could having spent most of his deposit the last 18 mths, supporting his family and 3 kids, who currently is on his second period of self isolation in the last 5 weeks because one of his kids has been exposed to it at school (and hes getting no further support for these further loss of earnings). 2) A taxi driver who had gone self employed 9 mths before after being screwed over by his boss and thus hadnt submitted a tax return when the pandemic hit and who received no support for the first year and who has received a pitiful amount for the 8 mths of this year, who has been working 3 jobs for most of the time people have been moaning about not getting support or getting their family to bail them out

Yes these grants are classified as income, the first 3 go on your tax return in 20/21 the 4th and 5th ones go on your 21/22 return and are liable for national insurance and income tax. Inland revenue have no right to ask what the grants are spent on, do they ask what other people who receive support spend there money on? Or do you want them to be asking the same questions of everyone who ever receives govt support?

What would you have done differently that would have been fair to everyone and not open to fraud?

Maybe it does but I do get fed up when I hear relatively well off folk getting grants ostensibly to keep them afloat yet able to at the same time able to afford luxuries…during a time of need and great difficulty for many. But I just needed to get it off my chest. And that I have done.

 

[Mudball]

I am not convinced these grants are and have been always used by some claimants to keep business afloat, or self-employed ticking over, as some self-employed I am aware of in receipt of grants seem to have been able to magically afford new cars, vans, extensions, hot tubs or holidays…

I would hope inland revenue are requiring evidence of what the grants are being spent on and are very watchful for fraud. There are very many for whom the grants will have been very welcome, properly used, and the only thing keeping their head above water…but there will of course be some others.

I am guessing that these grants are counted as income, and so this 5th one will be counted as income for this current tax year and so monitored in that way.

There are a lot of people who needed it. Fundy already pointed it out. Even within the relative ‘well off’ this has been a blessing. From experience and friend circle, the first couple were god sent. It acted as bridging loans for many. It also allowed people some space to pivot and adapt to do different things. Go from being a decorator to being a home based food catering etc. So I won’t kick it.

On the last point on the ‘new cars’. Again it may look wrong, but need to understand the circumstances. Before lockdown our car was coming to end of its PCP. It turned out lot cheaper to swap for a new car than keep the old one. Optically it looks we have a shiny motor, in reality it is a saving tool.

I know you wanted to get it off your chest and you are not judging. Good on you. End of

 

[Mudball]

Looks like there is new info required for the 5th grant. Will make a few people fill out SAs early this year..

 

[fundy]

Looks like there is new info required for the 5th grant. Will make a few people fill out SAs early this year..


View attachment 37958

as per post 212 you need to calculate your turnover, there is no requirement to do your full SA and submit it early though, the deadline is still Jan 31st

 

[Mudball]

as per post 212 you need to calculate your turnover, there is no requirement to do your full SA and submit it early though, the deadline is still Jan 31st

tnx.. also reading thru.. looks like turnover does not include prev SA grants... so pure business turnover

 

[fundy]

tnx.. also reading thru.. looks like turnover does not include prev SA grants... so pure business turnover

yep thats correct for this grant claim, when you do your SA there is a separate box for the grants to go in too