Help for self employed

[Deleted member 1740]

could be tough for some...and it's not as if you can claim UC and ask for an early payment of that if you are going to get income 'support' in June that is backdated.

Maybe ask for an extension to an existing overdraft facility - or stick it all on a credit card...

I understood that you could apply for UC and claim the taxable grant To be paid in June. The taxable grant will be taken into account as part of earnings for next year.

also if you claim UC you will be paid within a few days instead of waiting 5weeks.

 

[drdel]

when you say self employed do you mean youre the director of your own limited company?

If so this is the poignant part from the limited info available

"those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes."

Will be a challenge for those people who have chosen to form a Ltd company and pay themselves a low salary (reduced NI) and 'taxed at source) like many TV personnel etc.

Also interesting for those with 'cash' businesses with 'two sets' of accounts !!

 

[drdel]

No not at all, the two arent linked at all I dont think

The 8 weeks is how long they think theyll need to get everything in place, calculate and pay several million people. The fact that there is this delay is allowing them to offer a period of grace to those who havent submitted I expect

I think it is also to allow HMRC to do some fraud checks as 'some' SE fly close to the wind in their registered earnings so they will be X-checking with VaT and bank records before paying - entirely correct as it 'public/taxpayers' money.

 

[drdel]

Thanks.

IR35 is merely a classification system which you are in or out.

If its been a convenient way for you and your 'employer' to avoid costs/tax then that's the risk of using the system. It has been under review by HMRC for several years because it has been abused by some to avoid tax and NI. If you were booked and paid via an agency then you may have a route to claim but I suspect its a nightmare.

 

[Lord Tyrion]

Will be a challenge for those people who have chosen to form a Ltd company and pay themselves a low salary (reduced NI) and 'taxed at source) like many TV personnel etc.

Also interesting for those with 'cash' businesses with 'two sets' of accounts !!

Tough nuts to them. They've played games to avoid tax, they can't have it both ways.

 

[Fish]

Will be a challenge for those people who have chosen to form a Ltd company and pay themselves a low salary (reduced NI) and 'taxed at source) like many TV personnel etc.

Also interesting for those with 'cash' businesses with 'two sets' of accounts !!

I think this is going to be me, I’m SE but trading through a limited co and am a sole director, so pay myself the highest monthly allowance I can get away with, hence my NI doesn’t usually kick in until month 11, which I’ve just paid, so I believe I can only claim 80% of that max monthly allowance, but it’s something I suppose!

I can defer my VAT quarter though, which is a help but people need to be mindful it’s a deferment, youve still got file your accounts and pay in the future!

There’s no free lunch.

 

[Deleted member 1740]

I think this is going to be me, I’m SE but trading through a limited co and am a sole director, so pay myself the highest monthly allowance I can get away with, hence my NI doesn’t usually kick in until month 11, which I’ve just paid, so I believe I can only claim 80% of that max monthly allowance, but it’s something I suppose!

I can defer my VAT quarter though, which is a help but people need to be mindful it’s a deferment, youve still got file your accounts and pay in the future!

There’s no free lunch.

Tax avoidance? ??

 

[GreiginFife]

Tough nuts to them. They've played games to avoid tax, they can't have it both ways.

Again, complete misunderstanding of how it works. My total tax bill for my "company" which is basically me, was £47k last year. When factoring personal tax, corp tax and VAT.
The div end tax and lower PAYE payment is to avoid getting hit with a double whammy of high Corp and high personal tac against a backdrop of getting zero employment rights and holiday/sick pay.

Show me many other people that paid just shy of 50 grand taxes last year.

 

[ColchesterFC]

Tax avoidance? ??

Nothing wrong with that. It's evasion where the problems are not avoidance.

 

[Fish]

Tax avoidance? ??

I don’t need to pay myself a high monthly wage, I’ll pay enough corporation tax to make up for what they can’t get their hands on sooner ?

 

[Deleted member 1740]

Nothing wrong with that. It's evasion where the problems are not avoidance.

Aye, the likes of Amazon are Ok to do it.

 

[Lord Tyrion]

Again, complete misunderstanding of how it works. My total tax bill for my "company" which is basically me, was £47k last year. When factoring personal tax, corp tax and VAT.
The div end tax and lower PAYE payment is to avoid getting hit with a double whammy of high Corp and high personal tac against a backdrop of getting zero employment rights and holiday/sick pay.

Show me many other people that paid just shy of 50 grand taxes last year.

Ultimately it depends on what you earn. If your income is large then obviously so is your tax bill.

I'm pleased you are genuine with your tax but unfortunately plenty are not. Drdel touched on those who are not and I agree with him. I see it too much and it annoys me.

 

[3offTheTee]

Again, complete misunderstanding of how it works. My total tax bill for my "company" which is basically me, was £47k last year. When factoring personal tax, corp tax and VAT.
The div end tax and lower PAYE payment is to avoid getting hit with a double whammy of high Corp and high personal tac against a backdrop of getting zero employment rights and holiday/sick pay.

Show me many other people that paid just shy of 50 grand taxes last year.

Expect you MUST have had reasonable earnings though!

Hard work reaps the due rewards.

 

[GreiginFife]

Expect you MUST have had reasonable earnings though!

Hard work reaps the due rewards.

Not really. People's perception of the contract market is usually way off reality. By the time I have paid my own pension, holiday and set aside for possible sick pay I earn no more than a usual Business Analyst but with more responsibility.
And that's only 25 days holiday.

 

[GreiginFife]

Ultimately it depends on what you earn. If your income is large then obviously so is your tax bill.

I'm pleased you are genuine with your tax but unfortunately plenty are not. Drdel touched on those who are not and I agree with him. I see it too much and it annoys me.

I personally know hundreds of contractors and the vast, vast majority are above board. Again there is this perception that everyone that's a contractor must be a rogue fleecing the system.

 

[Deleted member 1740]

Ultimately it depends on what you earn. If your income is large then obviously so is your tax bill.

I'm pleased you are genuine with your tax but unfortunately plenty are not. Drdel touched on those who are not and I agree with him. I see it too much and it annoys me.

Whilst the likes of Amazon and even Jacob Rees Mogg’s company getting away without paying £0 Corporation Tax. Disgusting.

 

[drdel]

Ultimately it depends on what you earn. If your income is large then obviously so is your tax bill.

I'm pleased you are genuine with your tax but unfortunately plenty are not. Drdel touched on those who are not and I agree with him. I see it too much and it annoys me.

I think there are quite a few self employed who are poorly advised by accountants who think its clever to tell clients how much they can save without mentioning that it is pretty easy to cross check against the averages for various businesses and pick up anomalies.

I believe the Chancellor has an opportunity to 'level' up the PAYE and self assessment mechanisms.

 

[GreiginFife]

I think there are quite a few self employed who are poorly advised by accountants who think its clever to tell clients how much they can save without mentioning that it is pretty easy to cross check against the averages for various businesses and pick up anomalies.

I believe the Chancellor has an opportunity to 'level' up the PAYE and self assessment mechanisms.

Will he level up the rights that go with that? I doubt it. As Covid has admirably demonstrated, we are NOT disguised employees of we are terminated and permanent staff in the same business unit are not.

 

[User20204]

And that's only 25 days holiday.

So you're not self employed then.

 

[ColchesterFC]

Aye, the likes of Amazon are Ok to do it.

This where it annoys me. Three or four years ago my limited company paid more UK corporation tax for the year than Amazon and Starbucks combined. I reduce my tax liability as much as possible within the rules as they are but would be happy to pay a higher tax bill if the multi-nationals were also playing by the same rules.