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Original poster

Coronavirus has ruined all my plans

58 replies

Corkiecova · 26/03/2020 17:35

I am long-term disabled not worked for over 10 years. After a radical treatment last year I had hoped to return to work, self employed at home (all I could do) and was working towards that.

Now the chancellor has announced that with the new package for the self employed contributions for the self employed will equalize and as a result I will never be able to do this as I won't be able to afford my contributions meaning Ill never work again at all most likely. I'm only 42 and my life is over. Trapped on benefits with nothing, forever. My dreams were all that kept me going and now its over for me.

I do know I am being unreasonable but this is the end for me, no point anymore.

OP posts:
Bluntness100 · 26/03/2020 18:18

I don’t understand this either, it’s a sliding scale based on what you earn, not a flat rate, and surely benefits are not removed if you are just starting and don’t earn anything.

Do you not think you should look into it before deciding. And when you say you were working towards it, what had you done?

DogInATent · 26/03/2020 18:27

Thanks @WitchDancer - I knew it changed but couldn't remember off the top of my head what it changed to. Under £3/week and the only fixed element of NI as self-employed.

NI is not a barrier to a small business.

@Corkiecova - keep working towards your dream, once this blows over there are going to be lots of new start-up businesses and I predict there will be a lot of support available to get them off the ground.

Inkpaperstars · 26/03/2020 18:32

He did say that he was not predicting any future policy yet, nothing is decided OP. Everything is up in the air. Also even if changes are made you don't know what exceptions may be. I don't know much about it but I know you just despair. It's easy to fall into the trap of catastrophising and seeing the worse case scenario as the definite outcome, especially when you have already been through so much.

Please keep hoping, it sounds like you have really good ideas and I admire your goals. Don't give up hope. Keep an open mind, don't panic and get lots of advice if and when any changes do occur. Policies change all the time. It makes sense for the govt to support people like you back into work.

Inkpaperstars · 26/03/2020 18:33

Sorry, I meant to say you mustn't despair.

HollowTalk · 26/03/2020 18:34

The Chancellor has introduced temporary measures - I've taken a lot of notice of it as it affects me. It's not going to affect you, OP, don't worry.

RandomLondoner · 26/03/2020 18:35

But if they make the NI contributions to high I'll never be able to even start!

Can you please expalin what you're talking about? In general they don't charge you more in tax and than a percentage of what you make, and that above some threhold, so what you're saying makes no sense. (Unless the £3 a week class 2 contributions are now going to be £30 or £300 or something, which I highly doubt.)

If I'm likey to lose any pension because of trying to do this then I'm stuck

Again, I've no idea what you're talking about. Why would making some self-employed income affect your pension?

1981m · 26/03/2020 18:36

Mine too. I was due to finish a postgraduate degree and return to work in June. God knows what is going to happen now?

Jaxhog · 26/03/2020 18:42

Please don't be despondent. This situation will pass, and with that will come new opportunities. I know its tough for now, but take this time to make yourself more prepared. Maybe learn an online skill you don't already have that would be helpful?

Above all, remind yourself that you still have a future in which there will be good things you can't imagine right now.

Dishwashersaurous · 26/03/2020 18:44

But you don’t pay ni if you are not working. The assumption in the different rates is that self employed are making private provision as can’t access the state. Therefore even if you are self employed you should be planning on making provision to the same amount as the tax anyway

Chewbecca · 26/03/2020 18:48

You'll surely be better off earning something and paying NI than earning nothing? Not to mention the potential earnings if things go well.

MyDcAreMarvel · 26/03/2020 18:56

It’s going to be a big issue for Maternity Allowance too.

DogInATent · 26/03/2020 19:11

Again, I've no idea what you're talking about. Why would making some self-employed income affect your pension?
If you don't earn enough NI stamps (qualifying years) your state pension entitlement is reduced proportionately.

StrawberryBlondeStar · 26/03/2020 19:11

There has always been a plan to get the self-employed more in align with paye. So paying tax every month and also not being a year behind. This is part of the logic behind making tax digital.

Mummy0ftwo12 · 26/03/2020 19:15

you can also earn up to £1000 without reporting / paying tax on a hobby business.

RandomLondoner · 26/03/2020 19:17

If you don't earn enough NI stamps (qualifying years) your state pension entitlement is reduced proportionately.

What is the government proposing that will make this more likely?

I literally don't know what's been announced, I'm asking for that information because I can't find it. The only thing I've seen is a fragment of speech that suggests self-employed might in future be taxed as much as employed, which doesn't seem unreasonable.

StrawberryBlondeStar · 26/03/2020 19:24

@RandomLondoner the argument has always been the self employed should not be taxed as much, because we don’t have certain statutory rights (paid holidays, sick pay and now pensions). The problem is too many people have use loop holes to avoid tax etc and so there is an impression the self employed are not paying their way. (I’m a sole trader and the number of people who are shocked when I say no I don’t get dividends etc).

Original poster
Corkiecova · 26/03/2020 19:27

But many will not survive if the NI contributions are increased its complicated. Could be an employee on more pay would pay a lot less NI than a self employed person earning less. It worked out that way under previous proposals that were scrapped.

OP posts:
SirChing · 26/03/2020 19:35

@Corkiecova I am so sorry that your plans have been shaken.

On the plus side, you have had a treatment which means you now have so many more choices than you did, even if those choices aren't the ones you planned.

I'm disabled too and am now bedbound most of the time. On PIP etc. I was working in a low paid job but had to leave. There is no treatment for my condition. I am 43 and a single parent to a DD who spends most time with my DM due to my disability.

I don't feel like there is no point. And I bet when you had your treatment you didn't either. This is a blip. And you can handle those because you have been doing for the past 10 years. Us disabled people are the strongest people I know. And you WILL find a way to make the most of your second chance.

Flowers Your time will come.

Lynda07 · 26/03/2020 19:41

You're not unreasonable to feel as you do but have to accept it. It isn't the end for you because this crisis will end - not by Easter as President Trump seems to think but later this year. China is even beginning to get back to normal slowly.

Take heart, there is a future. You're great to have worked towards independence in the way you have, make sure you have recorded every step because it will give hope to others in your position. I think you're ace!

Flowers
Snowman123 · 26/03/2020 19:45

How much do you plan to earn?

You can earn £8500 before you even think about NIC.

bridgetreilly · 26/03/2020 19:50

Class 2 NI (for self-employed people) isn't on a sliding scale but there is a threshold. If you don't meet the threshold you don't have to pay it, and if you do meet the threshold it's not an onerous amount. It's £3/week and you have to be earning over £6365. If you earn over £8632 then you're into Class 4 contributions.

OP, I don't think it's at all clear yet what the changes will be in the medium to long term, but whatever the outcome, I don't think it should put you off trying to set up your small business. There will always be some kind of a threshold before you have to pay anything. And after that it will be on a sliding scale. It may end up being a bit more than you might have paid, but it won't make a significant difference for most micro-businesses.

What you can't do right now is claim the extra relief for self-employed workers, because you don't have a tax return from last year to support that. But you certainly shouldn't let it put you off making your plans for the future.

Original poster
Corkiecova · 26/03/2020 19:53

Thanks everyone this link explains the planned changes last time www.moneysavingexpert.com/news/2017/11/abolition-of-class-2-national-insurance-payments-delayed-until-2019/

It may not seem much to others but its a huge obstacle to disabled people getting into work especially when they may never earn much at all.

Hopefully this won't be back on the table, but it sounded like it from what was said, but its a stressful time so perhaps I'm reading it wrong.

OP posts:
bridgetreilly · 26/03/2020 19:54

Also, just to be clear you pay the tax/NI based on your PROFITS from the business, not your income/turnover. You calculate income minus outgoings, and what's left is the amount that counts for tax/NI. So you never, ever pay more than you earned. You only ever pay a proportion of what you earned. You do need to make sure you set aside a proportion of all the income you have in order to be able to pay any tax/NI. But you never have to pay that out of any other sources of income e.g. benefits.

Original poster
Corkiecova · 26/03/2020 19:57

@snowman123 thats true but I need to pay NIc 2 to get any pension at all. I have nothing else no savings, no pension. Last time they planned to put up NIC so much I wouldn't be able to afford them so would lose my pension credits. If tbey do that I'd be better off not working at all as in the support group they pay my stamp for me.

OP posts:
bridgetreilly · 26/03/2020 19:58

Yes, OP, you're right. You might have to pay more NI if they introduce that scheme than if they didn't. But either way, you'd still have more income if you earned it than if you didn't.

Lets say you could make £6000/year in profit. If you earn that now, you pay about £150 of it in NI and keep £5850. In the new scheme you might pay £750 and keep £5250. You'd still be £5250 better off than if you hadn't set up the business. That's the point.