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.

Well she’s had a lot of extra cash by paying a lot less tax, and her husband is on a good salary so little sympathy

It’s bloody ridiculous isn’t it user? This assumption that a partner is happy to pay all the bills and living costs for someone they are in a relationship with?

strawberryblondestar
us too. Feel really really shat upon.

to you. I hope you can find a way to survive.

unless there has been further guidance I don’t think a director of a PSC can furlough themselves

This is exactly what they are saying. A director can't down tools therefore they are not fitting the criteria

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.

Actually, quite a few of the things that many self employed people can claim tax relief for, employed can also claim and adjustment in their tax code for. Most people simply can't be bothered to find out what they can do to reduce their tax burden. For example, I claim back laundry, professional memberships etc, all of which can be claimed by colleagues who are employed in the same sector. Granted, there are some things that employees can't claim back, but then there are many costs that their employer covers for them instead. So swings and roundabouts.

The self-employed also typically do not have recourse to the same benefits as the employed - we get no statutory sick pay, so would it be right to ask us to contribute towards that scheme? Also bear in mind the other downsides of self-employment - no holiday pay, no protection against unfair dismissal (if you're a contract worker, for example), no security in month-to-month income etc. There are ups and downs to both employment and self employment.

Well you might want to remember that even if your dsis had paid all the taxes she should have she would

• not have been paid until June at best
• wouod still have paid taxes in it
• and has higher taxes to contemplate because the government has decided to finance this ‘help’ by raised taxes in SE.
• it’s an average over the last 3 years in record with HMRC so you actually have to be SE for 4 years and not have had ANY issues during tha time that couod have decreased your income.

So basically as SE we are fucked. My DH, as employed person has never been told any of that. Just furlough NOW. Nit we will pay you your average wage over the last 3 years and you have to have been working for the same company during that time.

Plenty of people also did this to minimise child maintenance and divorce settlements. Hope they lose every penny they've got. YANBU.

As for being generous, there are MANY things that someone who is SE doesn’t have

• paid holiday
• paid sickness days
• contribution to a pension
• stability in income

I can promise you that most SE would be happy to pay the little bit more on NI to get all that (just getting paid holiday would cover that tbh).
That sort of talk is just bashing people up again when you THINK someone has an advantage that you don’t have wo even looking if this comes at a (high) price.

You can't complain that a system you happily conned suddenly won't help you out in an emergency. Serves her right.

SE are getting help .

No one has answered yet why employed workers that earn over 50k can claim 80% of their wage, but SE workers can't.

I don't think anyone on mn decided the rules - how can anyone here answer that? Why do you think it is?

No one has answered yet why employed workers that earn over 50k can claim 80% of their wage, but SE workers can't.

Most of them can't. 2.5k is just about 80% of your after tax pay if you earn dead on 50k, but PAYE people earning any more than that will be getting less than the 80% as it's capped at 2.5k. Obviously there's still a difference in the way the two groups are being treated but worth being precise.

Well 2.5k a month would make the world of difference to us. But we get sod all.

@SunshineCake, read my post above.
You need to go above the headlines. It is NOT the same than what employed people will get, even if they have always been very honest re HMRC.

@houselikeashed I see what you're saying and I don't know the reason. Do we even know the reason why hmrc deemed £50k the magic number? Surely everyone earning over that should have a capped figure like the employed people.

YANBU. I’d have no sympathy either.

My dad used to be self employed, and I remember him telling me that the trade off of greater flexibility and more money per job means having to weather the lean times. This is a lean time made worse by her own actions. She should have been putting money away.

Yanbu, many self employed people have reaped the rewards of self employment either by using perfectly legal tax avoidance schemes or by simply being paid cash in hand and not declaring it . Now they want the same benefits as those on paye who are taxed at source with no opportunity to offset their earnings . You cant have your cake and eat it!

OK. So are you saying I should be taking cash in hand, and fiddling my expenses? really??

@zonkin why is it fair? You haven't done anything illegal, why shouldn't you get paid what you should. We are a limited company too on advice from the accountant. My DH was self employed previously and I was under an umbrella company. Now we will loose our house and we have a three year old and a newborn because we paid dividends. Well that's great. It's not like we were earning masses, probably a good year was 40k between us since the kids.

I think this whole situation is going to teach some people a very tough lesson in honesty

I doubt it, puds - with a mentality like this they'll probably fail to declare even more because they'll feel hard done to

Yes. And all those who have had the tax benefit of paying themselves dividends for years are also feeling it. Well, if you minimise what you pay in, this is what happens when you want something back

Actually directors of limited companies are entitled to nothing at all as it stands as far as we have been told- as they are classes as fully employed but if they furlough themselves then the company would cease to exist. Also you still pay tax on dividends as well as corporation tax so it doesn’t end up any better than paying income tax, or certainly hasn’t for us. We do what the accountant tells us to do at the end of the day as they do the books.

Anyone gleefully rubbing their hands whilst watching people be plummeted into debt and uncertainty, watching their business go under, is not somebody I would want to know. Our business is classes as key work but if we have to self isolate we will get SSP and that is it, whilst still having to pay business expenses that exist whether we work or not, on top of personal expenses. Tell me how that’s fair whilst someone else gets 80% of their earnings for doing nothing and not putting themselves at risk like we have to, coming into contact with multiple people per day in our line of business.

Avoiding taxes hahaha She has reaped her reward! You have said all that I would have said... She is selfish and bitter!

Jealousy is a really ugly trait. Most small businesses would collapse if they didn’t take a bit out. I have a small cafe and unlike most of them we are VAT registered they take £4000 every month from me. No wonder people do it.

I’m acquainted with someone who lived the high life on benefits and a cash-in-hand job. Nothing declared. Rent, nursery both subsidised. Now panicking because of the drop he’ll take in disposable income. We all reap what we sow.