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.

I'm self employed, mostly paid by bank transfer and very occasionally cash. But I declare the lot. My problem is that I had major surgery during the past three years, so my average will be down.
I'm not complaining though, just relieved I'll be getting some help.

YANBU for falling out with her. I am SE and have NEVER hidden any money that I get, every single job is meticulously recorded and my accounts are squeaky clean. It really annoys me that people assume that SE must want cash, or are fiddling. I frequently get offered cash with a wink and a comment about not having to declare it I much prefer card payments actually, even though I pay a small fee per transaction.

I have a successful business, but I've been off for a significant amount of time due to having had medical treatment and also a baby, so while I'm very grateful to be getting help, it will be nowhere near what I am used to unfortunately. But I suppose that's the risk you take with being SE.

Hi
Yes my ds was roofing for the same company for 4 yrs under paye..hey ho the boss already wealthy decided most of his labourers/roofers were now going to be selfemployed..ie still working for them..but no longer getting holiday pay , sick pay,paid bank holidays...why is this..there is a employment loophole that allow's employers do do this....also he is CIS which means he pays 20%tax from day one.
As this all happened 3 yrs ago..not including this tax yr..he'll get not much ...nowhere near his monthly income....He had no choice if he wanted to keep his job.

She’s getting exactly what she deserves!

Without sounding harsh to anyone, each persons issues are different to understand. What might be a big deal to your sister, may not seem like one to you but you can’t discount her feelings. Yes, I agree that she should have declared more earnings but at the end of the day, she didn’t and there’s not a lot that can be done about it now. She may use this and put it into practice in the future. What may be insignificant to some is a massive thing for others. It’s all about personal Perspective. I’ll agree that your sister probably could have handled it better but hey ho, she’s struggling with a loss of earnings just as you are even though the amounts are different. Sorry, just my opinion. X

That’s karma for her!

You mean she was taking money from the government illegally by not declaring it, was then disappoint that the government were late to help the self employed, and when it did come through, she was still disappointed because she had defrauded the government by withholding true earnings. What goes around comes around I'm afraid. She only has herself to be disappointed in and there are a lot of self employed that should hang their head in shame too.

Try to avoid that topic and be nice to each other. It’s hard enough.

Sadly my other half hasn't had the best efforts over the last 3 yrs so his earnings are well down compared to previous years! He's had an accident that took him out of work for 7 months and then he had a stroke which again took him out of work for a few more months! People like your sister boil my piss as there are genuine honest people that won't get much either. We were hoping this year would be better but sadly not 😪

YANBU.

Her DH is on 40k a year! She's not poor and it serves her right for being dishonest.

Life is too short I agree, but it's also too short to remain that immature and selfish without a reality check.

She'll get over it.

Yes you are right. Now make up with her. Life is just too short & in these strange times you don't want to be left estranged.

Big difference between someone not declaring all their income (illegal) and someone paying themselves combination of salary and dividends (perfectly acceptable and legal).

The reason for tax credits on dividends up to higher rate is because the company will have already paid corporation tax on the profits (dividends aren't deductible, salary is).

It is tough on people who are onky a little over the £50k threshold. It reminds me of the child benefit where two parents can earn £49k each but if one earns £50+ can't claim any. People who deliberately pay themselves very small wage just under NIC class1 rate and take rest of money as dividends paying less tax bad luck, no sympathy for them.

@threatmatrix

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.

Given those who falsified earnings will be getting less compensation, I think the word is schadenfreude rather than jealousy.

I'd of said it too. YANBU

I agree with you op

I agree with OP.
I'm SE and now not working but I am not hugely concerned at the minute. I have money behind me, a couple of outstanding invoices and when I do my tax returns I don't deduct nearly half of what I could to save tax on. So in essence I've been paying in more than I should.

What a stupid thing to say about people who own Ltd companies. A very misleading comment for those that don’t know how it all works. Accountants advise directors to take their wages as dividends. It’s how it’s done. You clearly have no idea about how hard these people work or what taxes they pay!!!!

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.

Do what? Lie and cheat?

The £4K VAT you pay each month doesn’t come from you. Your customers pay it. It was never yours. You add it to your prices, offset your input VAT and pay what’s left over to HMRC. Why do you feel hard done by?

The above comment is for you @HermioneWeasley

For anyone that realises that Ltd companies pay plenty of tax, are perfectly legal and do what is advised by their accountant. Not to be confused or compared with someone that avoids paying tax in a criminal way!!!!!

www.change.org/p/uk-parliament-small-ltd-company-directors-to-get-government-support-like-the-employed-and-self-employed

I think you are right OP but it’s one of those times where we need to try and show each other kindness. I hope you sort things out with your sister.

I suppose that's what u get for evading taxes when majority of people have to pay. It hardly ever works in someones favour

You reap what you sow BUT even though she’s not going to get anything. She’ll still have to pay the higher NI fees being introduced to the self-employed.....which is unfair.

If she did declare all & made over £50k she would also not be entitled to anything. The government is playing this game very cleverly.

They’ll tell you the good bits, don’t promote the bad bits & with that info, they let YOU tear each other apart.

I have no sympathy for tax dodgers.