Self employed

[AVB]

Out of interest what is the definition of a self employed person? I am work for myself but via my own limited company so I assume that isn't the same 'self employed' that people refer to on the news.

 Genuine question. 

[Mice!]

I'm expecting if you claim for anything it will be the minimum wage, dividends and expenses won't come into it?

[WalkedUp]

Do you pay yourself via PAYE?

52 minutes ago, AVB said:

Out of interest what is the definition of a self employed person? I am work for myself but via my own limited company so I assume that isn't the same 'self employed' that people refer to on the news.

 Genuine question. 

 

[grrclark]

Same position as myself.  To all practical intents you are self employed, but in the eyes of HMRC your both an employee and employer.

If you have paid yourself via PAYE then theoretically you could furlough yourself and have the government subsidise up to 80% or the maximum limit of your monthly salary.  Of course if you have adopted a position of the most tax efficient measures and paying yourself the absolute minimum and then dividends then you are going to get 80% of not much.

My gut feel however is that it might just not be so simple.

Thankfully I can still do work for my clients remotely and they still have an appetite for me to do that, but the bulk of what i am doing right now is in the oil industry and it is tanking.  The rest of what I mostly do is advisory services to the private equity market and they have got a major dose of spook right now as well, understandably.

How quickly things can change.

[NatureBoy]

58 minutes ago, AVB said:

Out of interest what is the definition of a self employed person? I am work for myself but via my own limited company so I assume that isn't the same 'self employed' that people refer to on the news.

 Genuine question. 

Was chatting to anther self employed decorator fella like me about this  yesterday AVB. He opperates same as me but runs as a limited company. Not sure how it works for him? He was saying his position is chief exective of his business so i said surely this makes him employed? His income is taken as a dividend as an employee! So would that mean he could get a percentage like other employees seem to be going to get? I told him to ask his accountant (no joy) or CITB for what they are worth? As for likes of me, all i have heard they maybe defering  any tax we owe/ due to next year? Worrying times. Glad i got no mortgage or family to support. Finished last job yesterday and collected gear from others. Even remote beach hut on the coast as customer wanted keys back. Jobs cancelled and suppliers shut for the foreseeable future. Doing estimates today for other jobs  hopeful in the future. I love working this time if year doing what i do as it mainly externals on  rural period properties.  Mat have to decorate my own house.        NB

[AVB]

23 minutes ago, grrclark said:

Same position as myself.  To all practical intents you are self employed, but in the eyes of HMRC your both an employee and employer.

If you have paid yourself via PAYE then theoretically you could furlough yourself and have the government subsidise up to 80% or the maximum limit of your monthly salary.  Of course if you have adopted a position of the most tax efficient measures and paying yourself the absolute minimum and then dividends then you are going to get 80% of not much.

My gut feel however is that it might just not be so simple.

Thankfully I can still do work for my clients remotely and they still have an appetite for me to do that, but the bulk of what i am doing right now is in the oil industry and it is tanking.  The rest of what I mostly do is advisory services to the private equity market and they have got a major dose of spook right now as well, understandably.

How quickly things can change.

My wife receives a small salary. I don’t as, until recently, I was also getting income from deferred bonuses when I was previously in employment. The rest we take as dividends. 

I told the wife that she is now furloughed! 

I was hoping to give up work completely but I haven’t been paid for some previous work I did, I can’t access my pension at the moment as the fund is frozen and my saving will dry up at some point so looking at options.  My work is either for investment banks/wealth managers or private equity advice and both are running a mile from doing any work at the moment  

 

 

22 minutes ago, NatureBoy said:

Was chatting to anther self employed decorator fella like me about this  yesterday AVB. He opperates same as me but runs as a limited company. Not sure how it works for him? He was saying his position is chief exective of his business so i said surely this makes him employed? His income is taken as a dividend as an employee! So would that mean he could get a percentage like other employees seem to be going to get? I told him to ask his accountant (no joy) or CITB for what they are worth? As for likes of me, all i have heard they maybe defering  any tax we owe/ due to next year? Worrying times. Glad i got no mortgage or family to support. Finished last job yesterday and collected gear from others. Even remote beach hut on the coast as customer wanted keys back. Jobs cancelled and suppliers shut for the foreseeable future. Doing estimates today for other jobs  hopeful in the future. I love working this time if year doing what i do as it mainly externals on  rural period properties.  Mat have to decorate my own house.        NB

He would get dividends as a shareholder not as an employee. 

[oldypigeonpopper]

hello, i would suggest anyone who owns a limited Company and takes payment from that Company but self employed you actually work for the company ,  far different to most self employed workers

[grrclark]

28 minutes ago, NatureBoy said:

Was chatting to anther self employed decorator fella like me about this  yesterday AVB. He opperates same as me but runs as a limited company. Not sure how it works for him? He was saying his position is chief exective of his business so i said surely this makes him employed? His income is taken as a dividend as an employee! So would that mean he could get a percentage like other employees seem to be going to get? I told him to ask his accountant (no joy) or CITB for what they are worth? As for likes of me, all i have heard they maybe defering  any tax we owe/ due to next year? Worrying times. Glad i got no mortgage or family to support. Finished last job yesterday and collected gear from others. Even remote beach hut on the coast as customer wanted keys back. Jobs cancelled and suppliers shut for the foreseeable future. Doing estimates today for other jobs  hopeful in the future. I love working this time if year doing what i do as it mainly externals on  rural period properties.  Mat have to decorate my own house.        NB

It is likely that he will still pay himself the minimum amount as an employee, so in theory he could furlough himself and get up to 80% of that amount, but anything he takes as a dividend would not count for any government support measures.

9 minutes ago, AVB said:

My wife receives a small salary. I don’t as, until recently, I was also getting income from deferred bonuses when I was previously in employment. The rest we take as dividends. 

I told the wife that she is now furloughed! 

I was hoping to give up work completely but I haven’t been paid for some previous work I did, I can’t access my pension at the moment as the fund is frozen and my saving will dry up at some point so looking at options.  My work is either for investment banks/wealth managers or private equity advice and both are running a mile from doing any work at the moment 

It is a nightmare.  After the Brexit impasse was removed what i saw was a significant uptick in the PE space, where folk had been sitting on their hands they then started to move at pace, but that all just came to a clattering halt.

To try and keep things ticking along, and win favour for the future, i'm now giving time away to some PE investors around their portfolio companies and giving guidance in how they can implement/improve resilience measures to support them through a protracted period of total unknown.  If they don't survive then the oil leaks out the machine and it will all seize.

It's hard not be pessimistic about where it might all end up, re your other thread, but everything right now is unprecedented so i'm expecting some really disruptive approaches to convention in how to get everything moving again.

 

[SpringDon]

Some industries (it and legal) force self employed to work as Ltd companies. Not sure why, perhaps liabilities.

[millrace]

Speaking with accountant about this very thing yesterday,,,,looking like dividends dont count,,,,well as she didnt really know cause they have no info as yet but when they say "oh dear"....you know your not getting anything,,so to sum up,,your employees will get something eventually the self employed will get something,,but as the boss we get nothing but a load of unpaid invoices,bills coming in,,and zero in the bank!!!!!.....really makes you want to continue running a buisness.......

[grrclark]

7 minutes ago, millrace said:

Speaking with accountant about this very thing yesterday,,,,looking like dividends dont count,,,,well as she didnt really know cause they have no info as yet but when they say "oh dear"....you know your not getting anything,,so to sum up,,your employees will get something eventually the self employed will get something,,but as the boss we get nothing but a load of unpaid invoices,bills coming in,,and zero in the bank!!!!!.....really makes you want to continue running a buisness.......

Once we get through the worst of this I think an awful lot of people will look at things the same way.

 

[kevin55]

https://www.accountingweb.co.uk/community/blogs/seeleyharris/coronavirus-what-help-can-freelance-workers-get?utm_medium=email&utm_campaign=AWUKPOW250320&utm_content=AWUKPOW250320+Version+A+CID_8182cb75d976fae1d020d88e622d8744&utm_source=internal_cm&utm_term=Coronavirus What help can freelance workers get

 

This was on Accounting Web today and may be of help

[Lloyd90]

I did say to a colleague the other day, this is going to have a big impact on the income of cash businesses, as they are saying even if the government does pay their wages, they will only do it based on their tax return 😬 

 

I think there are a lot of people who don’t declare what they should and that’ll sting for them. 

[TIGHTCHOKE]

3 minutes ago, Lloyd90 said:

I did say to a colleague the other day, this is going to have a big impact on the income of cash businesses, as they are saying even if the government does pay their wages, they will only do it based on their tax return 😬 

 

I think there are a lot of people who don’t declare what they should and that’ll sting for them. 

Oh dear what a shame, once again they've had it good for far too long, now it will backfire on those that milked the system!

[Lloyd90]

5 minutes ago, TIGHTCHOKE said:

Oh dear what a shame, once again they've had it good for far too long, now it will backfire on those that milked the system!

Yes I did have some difficulty feeling too sorry for some who have fiddled their taxes for years and now won’t get the help needed. 
 

It really is an awful situation, but then also struggling to feel sorry for the hundreds of thousands (or millions) living on finance, credit, car payments and have now pay later schemes. 
 

I’ve always read try to have 6 months emergency money for bad times to see you through, anything that lasts longer than that, and we’re all done for. 
Looks like that’s very true these days. 

[Mice!]

If your working through or as a limited company then you should be able to go a month or so without pay, this happens if your between contracts.

It's far from ideal obviously but your playing the system in minimum pay, dividends and expenses so your only going to get a small amount of pay from the government.

Personally I'm expecting very little and I'm not sure if it will even be worth claiming for a few weeks, if we start talking months then I'll have to look at it.

[AVB]

38 minutes ago, Mice! said:

If your working through or as a limited company then you should be able to go a month or so without pay, this happens if your between contracts.

It's far from ideal obviously but your playing the system in minimum pay, dividends and expenses so your only going to get a small amount of pay from the government.

Personally I'm expecting very little and I'm not sure if it will even be worth claiming for a few weeks, if we start talking months then I'll have to look at it.

I can last for about 10 months. This is going to go on for longer. What do you mean by playing the system? I use legitimate tax reduction techniques used by all businesses.  Are you saying I should pay more? If so why and how much? How much extra do you pay over and above what you are legally obliged to pay?

The government said “nobody will be be disadvantaged by having to make the sacrifices demanded by the government” which isn’t true is it? 

[Mice!]

22 minutes ago, AVB said:

I can last for about 10 months. This is going to go on for longer. What do you mean by playing the system? I use legitimate tax reduction techniques used by all businesses.  Are you saying I should pay more? If so why and how much? How much extra do you pay over and above what you are legally obliged to pay?

The government said “nobody will be be disadvantaged by having to make the sacrifices demanded by the government” which isn’t true is it? 

I hope it doesn't go on for more than 10 months, if it does then everyone is in serious trouble. 

I pay what my accountant tells me to and no more, which is what I mean by playing the system, the changes to IR35 were going to change the system. 

And no it's not true,  something might change with regards limited company payments but I think we're way down the list.

[AVB]

10 minutes ago, Mice! said:

I hope it doesn't go on for more than 10 months, if it does then everyone is in serious trouble. 

I pay what my accountant tells me to and no more, which is what I mean by playing the system, the changes to IR35 were going to change the system. 

And no it's not true,  something might change with regards limited company payments but I think we're way down the list.

I agree with you. 

[Scully]

2 hours ago, Lloyd90 said:

I did say to a colleague the other day, this is going to have a big impact on the income of cash businesses, as they are saying even if the government does pay their wages, they will only do it based on their tax return 😬 

 

I think there are a lot of people who don’t declare what they should and that’ll sting for them. 

I’d be perfectly happy if I was paid an amount based on my tax return. I know there will be some who play the system, buts it’s far too much hassle for me; I just can’t be bothered. 
I don’t even mind if I receive nothing, as long as my bills are frozen for the same period. 
I just think it’s very very unfair and unreasonable for us not to have a level playing field.

[Lloyd90]

2 minutes ago, Scully said:

I’d be perfectly happy if I was paid an amount based on my tax return. I know there will be some who play the system, buts it’s far too much hassle for me; I just can’t be bothered. 
I don’t even mind if I receive nothing, as long as my bills are frozen for the same period. 
I just think it’s very very unfair and unreasonable for us not to have a level playing field.

Don't disagree with that at all. 

[grrclark]

Let’s see what is announced tomorrow Scully.

As for the general sentiment of nobody losing out, just not going to happen unless you are exceptionally lucky.

Mostly everyone is going to take a hit through this.

[Scully]

49 minutes ago, grrclark said:

Let’s see what is announced tomorrow Scully.

As for the general sentiment of nobody losing out, just not going to happen unless you are exceptionally lucky.

Mostly everyone is going to take a hit through this.

I don’t doubt not all will get through this unscathed, one way or another. 👍

Edited March 25, 2020 by Scully
Didn’t read right! 🤔

[oldypigeonpopper]

hello, it will be interesting how they will pay out to the self employed, i am sure HMRC have all the details so maybe a refund on tax returns, but i think it will still be a minimum amount compared to the employed, i read it will be paid from March 1st ?

[grrclark]

8 minutes ago, oldypigeonpopper said:

hello, it will be interesting how they will pay out to the self employed, i am sure HMRC have all the details so maybe a refund on tax returns, but i think it will still be a minimum amount compared to the employed, i read it will be paid from March 1st ?

Announcement tomorrow so not long to wait.

The employment support element was certainly from the start of March.

As with any one size fits all approach it is full of compromise so will mostly be ok for most, to a level.