self-employed help

[houselikeashed]

So if my profit is £51k - I get no help from the government?
Is that right?

[BillMasen]

Not disagreeing with that point chips. If that’s what it’s saying that’s not fair and different to paye

[houselikeashed]

This is going to change our lives massively.

[ChipsAreLife]

Thanks Bill

[Sleepyquest]

Don't forget you can claim UC

[ChipsAreLife]

According to bbc it will help 3.8 out of the 5mill employed. So 1.2 mill of us are being left to try.

[Peapod29]

It a very harsh cut off IMO. If you have no savings can you not claim UC?

[ClashCityRocker]

There's a lot of confusion here about limited companies vs self employed.

If you have a limited company you will not be eligible for this even if you're a 'one man band' sole director/shareholder set up.

I must admit I'm surprised that he thinks 50k covers 95% of the self employed.

It does seem harsh because with the new (ish) dividend rates at profit of less than £50k the tax benefits of being incorporated are minimal and often outweighed by additional admin costs.

[houselikeashed]

Thats a lot of people who will be unemployed in the future, and claiming benefits. And not paying tax anymore.

[ChipsAreLife]

UC won't cover my bills. I'm so cross I've paid all this tax, my bill in January was large. And I'm not eligible for this help. I'm pregnant and not able to get another job. I just have to pray I can weather the storm and keep the work I have. But that's not likely 😪

[houselikeashed]

We are the squeezed middle again.

[OceanOrchid]

I'm sorry, but 50k per year is not the middle. Average salary in the uk is around 25k.

It is shit though, I'd have set the limit higher.

[friendlycat]

@BillMasen
Are you saying that if you are the sole person in a Limited Company and you pay yourself mainly through PAYE with some dividend that you will be entitled to 80% of your PAYE salary as a furloughed employee with no business? If so that is fine with me but surely there needs to be something? My business is in marketing for hospitality/the pub trade and they have all closed so all business cancelled for the foreseeable. But when things get better again hopefully my business can continue at some point next year etc.

[Helpwithaversion]

What happens if you’ve only been SE since last year (June)?

[BubblyBarbara]

Max dividend tax is 7.5%
Much lower than salaries, or self employed earnings which are taxed at the same rates

Plus corporation tax of 19%. Dividends are in profits after tax not takings

[BillMasen]

Cat, I don’t know. I’m not an accountant and haven’t seen any detail so don’t know if a sole director limited company can furlough it’s sole employee.

[BillMasen]

Barbara yes but as previously posted, the overall bill is still
Much lower. Everyone who does it knows that. That’s why they do it

[user1487194234]

Nightmare
Profits 53k each
Entitled to nothing
How can that be fair

[friendlycat]

Yes Bill. That's the detail. Can a sole director limited company furlough its only sole employee? There must be many of us.

[ChrissieKeller61]

Registered my business in feb 2019 so not a bean for me either . Not happy

[SeriouslyRetro]

Can anyone confirm either way if ltd sole trader type companies, will they be eligible to claim 80% on the proportion of Paye salary they took? Even if that is minimal, like £700/800?

Or does the fact you're a ltd company preclude you from accessing assistance on any paye salary?

[ChrissieKeller61]

@Helpwithaversion my understanding is we get nothing

[ClashCityRocker]

Max dividend tax is actually 38.1% (albeit on income over 150k)

And is 32.5% over around 50k of income.

And Corp tax of 19%.

It really isn't the tax wheeze it used to be, particularly if you are need to draw out the max dividends to live on.

A limited company with 50k profit and max divs taken out would only save a few hundred quid a year nowadays...which is often eaten up in additional accountancy fees as the compliance costs tend to be higher.

[BennyVegas]

If you pay yourself a salary and dividends through your own company, you are not covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating through PAYE.

www.bbc.co.uk/news/business-52052123

[KoalasandRabbit]

I started in October 2018 and eligible for nothing as I was employed before. Even though have earned nothing from employment since then. Quite a lot seem to have been caught by this rule and there's 0 help at all available unless you are eligible for UC which I'm not.

[friendlycat]

@BennyVegas
Yes that is what I picked up as well so 80% of the paye element of your salary. That is fine with me as I fully understand we cannot have the dividend element of it as well.