To not feel sorry for my sister?

[GlummyMcGlummerson]

My sister has been self employed in a beauty role for 4 years, and I'd say about a third of her (more expensive) work has been passed by the books in order to avoid taxes - "everyone does it", apparently.

When lockdown was announced she obviously stopped trading and moaned how the government did nothing for self employed workers. Until the 80% funding was announced - but because she declared so little on profits she'll be getting hardly anything. She tried to claim UC but her DH is on £40k a year and is continuing to work from home so is entitled to nothing. We live in the NW and they have very outgoings so I think compared to others they're very lucky to still have £40k pa coming in, and a mortgage break.

I fell out with her today because I've been given furlough, and whilst many would love to have paid time off a 20% wage cut is huge for me with 2 kids and one income coming in - and she said "at least you're getting something it could be worse it could be me". I went off at her and said she has her DH's income and maybe this is karma for fiddling her books.

I don't want to fall out with her, if the last few weeks have taught us anything it's that life is too short for that but it really pisses me off that she thinks she is so hard done by in this.

Agreed, you are either furloughed or you are not. If you are not, and can still work, then you won’t need help.

I don't understand why only the self employed workers are having an earnings cap applied? Why not employees too?

Back to the OP, absolutely serves her right and YANBU.

Chickens coming home to roost!l all over the place, although as someone whose always done everything by the book it’s galling that there’s no support there.

All those people bashing limited companies, by which I assume most mean PSCs doing it all by the book I paid overall about £500 less tax last
year. So why be a contractor, because it’s the only way possible for f doing my job part time.

Tough shit. She’s only got herself to blame. Greedy bitch!!

@houselikeashed

They are. £2,500 per month gross

Same for company directors taking dividends instead of salary, so they can claim benefits.

Now have company’s in the shit.

@Iamthewombat the problem being that if you take a strict interpretation of the rules, even if you are doing no income generating work then just filing your companies house paperwork, accounts or applying for the furlough grant would bar you from qualifying

Boobooboo84
No, I mean a cap on who can receive the £2,500.

Yeah, just think of all the divorced fathers who lied to avoid paying child support. Tee hee. Anyway, yeah, you’re right, but maybe avoid the subject of money.

Yes she brought it on herself but I don't think I'd be dishing out a lecture to my sister at such a stressful time. Unless I didn't like her very much I suppose.

The tax system is far more generous to the self employed than to those on PAYE when every penny after the allowance is taxed at least 20% plus National Insurance contributions also go up according to how much you get paid. Quite a hefty chunk of most incomes with a jump to 40% tax at a relatively low income.

With the various allowances against tax for the self employed it is quite possible, even when sticking to the rules and trading legally, to show no profit or be below the tax threshold whilst having enough to live quite comfortably.

Of course these more generous tax concessions are very useful and means that many small businesses pay less for the services we all need, the nhs, schools, roads, local services like bins emptied which are subsidised by national taxes, than the rest of us. It is impossible to have it both ways. If a person's actual living wage is what it seems through the books, then the self employed person has lost 20% of their pay, the same as the rest of us. Of course if what goes through the books is only part of the self employed person's wage then they will not have the income they are used to and maybe need to pay outgoings based on a much higher standard of living.

What else could the government fairly do? They will expect proof of income from PAYE workers before they start dishing out 80% of their wage. Of course they will want proof from the self employed and naturally that proof will be according to what goes through the books.

The majority of self employed people I know are in this situation....... One's a plumber who was on ridiculous money.

WAS.

Pahahahaha 😂😂😂😂

As long as they can still survive I think yeah serves her right a little bit... I do feel sorry for anyone self employed who now can't afford to live though. Universal basic income might have been a better solution.

The tax system is far more generous to the self employed than to those on PAYE when every penny after the allowance is taxed at least 20% plus National Insurance contributions also go up according to how much you get paid. Quite a hefty chunk of most incomes with a jump to 40% tax at a relatively low income.

That isn't quite true
Lots of self employed people are on PAYE.

Every tradesman I have ever met has accepted a discount for cash.

but why cap only the self employed? No one is addressing this.

Are you asking why there is a cap on self employed people but not a cap on.... what?

but not a cap on employed people. I'm talking about the earnings cap. SE workers who earn 51k cannot apply for the 2500 per month, but an employed person can.

Many of the self employed contract Project Managers at the company I work for minimise their salary and tax by taking as much as possible as dividends, they accept they will get little or no bail out and that was the risk they took.

My brother is the same, worried about what he'll do as the new contract he was due to start next week had been pulled, but he is 100% accepting it was his choice to not take as salary but dividends to reduce the tax he paid into the system.

I'm not talking about dividends.

many many SE people declare what they earn, and pay tax on it.

@houselikeashed exactly. I’m just over the threshold (and live in SE). Sole trader always paid all my tax and ni. If I was in a comparable job in house I could be furloughed and get 80 per cent of my salary. If I don’t get any work now I’ll get nothing.

She deserves everything she gets. It's immoral.

@RosesandIris Right ok, he was going to claim UC until the payment from the government comes through.

It's so unfair that he won't receive anything because of his girlfriend, living together isn't financially tied. I'm in the same position with my boyfriend 😞

You're definitely not wrong to have no sympathy!

What irritates me even more is that some of those of us who have always been scrupulously honest about our income are also getting no help, because it has pushed us above the 50K limit. And trust me, just because someone earned 55K last year, it doesn't mean they suddenly have mortgage or outgoings. Contrary to what Rishi Sunak would have the public believe, many people earning over 50K are not super rich! If I'd fiddled my books, not only would I have paid less tax last year, I'd also be in line for help now. I know a line has to be drawn somehwere, and coming up with a fair system in a tiny amount of time was a fiendishly difficult challenge, but I have absolutely zero sympathy for anyone who has lost out because they haven't been truthful.