Self Employed 2,917 a month Employed 2,500 a month?

[Irial]

Why is there a difference between what self employed people should be paid and employed? Surely we should be paying everyone the same? (The 80%)

Self Employed 2,917 a month Employed 2,500 a month?

Amendment proposed below

Statutory self-employment pay

(1) The Secretary of State must, by regulations, introduce a scheme of Statutory Self-Employment Pay.

(2) The scheme must make provision for payments to be made out of public funds to individuals who are

(a) self-employed, or

(b) freelancers.

(3) The payments to be made in subsection (2) are to be set so that the net monthly earnings of an individual specified in subsection (2) do not fall below—

(i) 80 per cent of their monthly net earnings, averaged over the last three years, or

(ii) £2,917

whichever is lower.

(4) No payment to be made under subsection (2) shall exceed £2,917 per month.

(5) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

Member’s explanatory statement

The purpose of this amendment is to make the Government ‘top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings averaged over three years, or £2,917 a month.

Presumably they then pay tax and NI out of that? Whereas the 2500 is after everything deducted by the employer?

Because if you're self-employed you still need to pay tax, NI and pension. If you're employed this is taken off for you.

Possibly to reflect self employed not getting any contractual sickness or holiday pay?

Tax and NI. self employed is calculated before tax, employed afterctax

If you really imagine this or any government is somehow being more generous to the self employed you are way off the mark. We are regularly vilified and subject to hate propaganda from governments and others who try to paint us all as tax dodgers.

Yep we will still get a tax bill so have to set that aside

That's a good point about the tax/ ni it makes sense. Kind of a bit wierd though, give you money and take it away.

I wasnt being snarky I just didnt know

Presumably they then pay tax and NI out of that? Whereas the 2500 is after everything deducted by the employer?

Actually, no I would have thought we would be taxed and ni on that

Maybe they think the company could pay the extra 20%?

You slightly mis understand this. Govt will subside 80% of wages UP to £2500. So if I pay a staff member £2000 a month, I will receive £1600. The scheme is capped at £2500, so it protects the wages of average to lower paid workers ( I have staff on furlough so have been looking into this.) I cannot lay them off (unlike that Wetherspoons fuckwit) and I have to come up with the 20%
A lot of the self-employed will get less, as a lot of them earn less than £2900/ mo

www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-job-retention-scheme-furlough-guidance
The above appears to be a good summary of the employee scheme, although clearly a lot of the details still aren't known.
My reading and understating of the subject is that employees will be paid through the PAYE system with tax & NI deducted at source as normal. Employers then can claim back 80% of their cost up to a max of £2,500.

Self employed scheme hasn't been announced yet, where are the figures from? are you looking at proposed amendments to the Coronavirus bill?

It’s not confirmed yet, but self employed people will pay their tax and pension out of that

I misworded the end of my post, by the 80% of "their cost" I mean based on full salary. My link has examples.

That is interesting to read as I have been furloughed and told I am only getting 80%. Not 100% with the gov making up the 80% to the company.

Looks like I can expect my notice if my employer has to pay the rest.

In self employed situations there is also an issue with the information held, as people don’t report monthly, like with PAYE, so the government are considering using an average based on previous accounts, possibly over three years. So if people have been not declaring stuff it won’t get taken into consideration for this purpose.

@magoria - It is up to your employer if they pay the 20% top-up or not. This is from the current government information:

To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.

Taken from here: www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees

Section 2(2) says net. So, after tax and NI.

Interesting so directors who take a low salary and then dividends (for which there is really no tax benefit any more) will not get as much as self employed?

I'm more concerned by the news this morning that apparently self employed people like myself and my husband won't get anything until May at the earliest, whereas employed people will get immediate help.

WTF???

Businesses wont get help until May (later april maybe) and so employed will only get help if the business has enough to pay them

Placemarking

Everyone employed isn’t all getting £2500 though, they’re getting 80% of their pay up to £2500, so £35,000 full time salary. I’ll get about £1660 net, 80% of my pay. Tax will be removed before it gets to me, same as now. Self employed people will get 80% of their average pay up to an amount, but will have to pay their own tax and NI our of it as they do now.

@BuffaloCauliflower
Why is there a difference between what self employed people should be paid and employed? Surely we should be paying everyone the same? (The 80%)

says so in the OP?

@Irial I don’t understand what you mean? I’ve already explained why everyone isn’t getting the exact same. Which bit don’t you understand?