living off savings for 16months

[wheresmymillionaire]

Just wondering what the general feeling is….
Is it fair that a self employed workers who used to earn £51k have to live off savings for 16months, whilst paye workers who earn £51k get £2.5k a month.
how can this be right? A family member used to work in the West End and is self employed. They're really struggling now. They can't even claim Universal credit as they have some online coaching work they do, but this doesn't cover their bills apparently, but stops them from getting the benefits. As I understand this, it must be wrong. What am I missing? Theatre was closed down, so why can't the actors etc be furloughed and get some money to see them through?

It's very wrong

And it's because of a mistaken belief that self employed people fiddle their taxes

I personally know of 3 families who will have to sell their house next year - settled families with children in schools

Google is telling me self-employed can claim up to £2500 a month (£7500 for three months.)

www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

The whole furlough system is massively set up to support employed people - but anyone self-employed has basically been left to fend for themselves.

DH and I both became self-employed in the last eighteen months, so neither of was were eligible for any help. When I brought it up on one of the furlough threads, I was told that self-employed people fiddle their taxes so why should I get any help from the government - totally ignoring the fact that we've both been paying tax in PAYE jobs for 15+ years up until last year.

@RandomLondoner

Google is telling me self-employed can claim up to £2500 a month (£7500 for three months.)

Only if you fulfil a certain set of criteria.

Otherwise you get nothing.

And it's because of a mistaken belief that self employed people fiddle their taxes

I’m sure some self-employed people fiddle their taxes, but is mostly because self-employed people can legally pay themselves a low wage in order to minimise their tax burden while also paying themselves an untaxed dividend.

There is a grant for self employed people. There’s been 3 so far worth around £20k and there’s another in Feb. They can also claim UC

Dividends are not untaxed, you pay taxes on all of your earnings.

@SendHelp30

There is a grant for self employed people. There’s been 3 so far worth around £20k and there’s another in Feb. They can also claim UC

Again, you can only apply for the grant if you fulfil a certain set of criteria. If you're newly self-employed you get absolutely fuck all, even if you've consistently paid your taxes up until setting up to work for yourself.

Whereas people claiming furlough could have been unemployed all their lives up until February of 2020, yet they can get 80% of their salary paid for them.

DH and I both became self-employed in the last eighteen months, so neither of was were eligible for any help.

Aren't you in (roughly) the same boat, for similar reasons, as employed people who changed job at the wrong time? It is unfair/unlucky that there is a gap in the rules that some people fall through, but this doesn't look like it's specifically discrimination against self-employed people.

There is a grant

If you earn UNDER £51k

If you earn over that you get NOTHING

According to them, they can't claim the self-employed grants, nor Universal credit. I doubt they fiddled their taxes. They use an accountant I think.

No, that’s fair. A self employed person with no income is no different from the millions who have been made redundant. They’re in the same boat. And it would be unfair for a person with substantial savings to get on universal credit.

What’s truly unfair are the various legal immigrants who have lost their jobs and have no savings but cannot claim universal credit because their visa allows no recourse to public funds. They only get new style or contribution based Jobseeker’s Allowance. Try living on £74/week.

What’s also truly unfair are all the disabled UK people on ESA who didn’t get the £20/wk increase that everyone on universal credit got.

Comparison of taxes paid by PAYE, self employed (sole trader) and Ltd. company director:

Comparisons of taxes paid

It's simple: if you've opted to pay yourself slow income made up by dividends to pay less taxes, it's now coming to bite you.

It isn't illegal, it was a good option for many, sadly, it isn't in this situation.

We all make decisions to end up with more income in our pocket. These decisions come with a risk just like it is to take travel insurance but not that covers certain sports we get involved with so save a few pounds.

The coronivirus was unprecedented but it wasn't totally impossible that something like this could happen.

There is a grant

If you earn UNDER £51k

If you earn over that you get NOTHING

Which I think the OP explaining pretty well in the OP, illustrated with a little example. Nevertheless, 13 posts in, and already there's a couple of contributions from people who seem unable to read.

YANBU, OP. It's horrendous.

The whole furlough system is massively set up to support employed people

It's set up to support businesses. If the intention was to support individuals (employed or otherwise) they'd have offered a UBI style scheme, as other countries have.

Interesting how many people still believe that everyone has been offered some kind of support. Is it that they only think of themselves, or that they look at the bare minimum detail and fail to notice all the exceptions?

They use an accountant I think
Which is probably what is costing them the grant now.

It's set up to support businesses. If the intention was to support individuals (employed or otherwise) they'd have offered a UBI style scheme, as other countries have.

Yes, which is why it's a hugely flawed system. It's not only businesses that support the economy. The individuals are important too, but this government has shat on a huge portion of society by doing what they've done.

I'm self employed, I've earned around 1-1.5k a month for the past 5 years or so. Since corona hit I've had 3 grants for the self employed from the govt totalling around 9.5k . I'm not complaining. I never fiddled my tax and this is the benefit.

I’m sure some self-employed people fiddle their taxes, but is mostly because self-employed people can legally pay themselves a low wage in order to minimise their tax burden while also paying themselves an untaxed dividend.

Do you mean those who own limited companies? I'm self employed (as a sole trader) and I don't pay myself any 'dividends' must ask my accountant. 😈

I’m sure some self-employed people fiddle their taxes, but is mostly because self-employed people can legally pay themselves a low wage in order to minimise their tax burden while also paying themselves an untaxed dividend

I was wondering when someone was going to raise dividends. Within the terminology of personal tax, people who pay themselves dividends are not self-employed, they are employees of their company, and can claim normal furlough payments based on their actual salaries. Which will be peanuts, as they will have paid themselves low salaries because paying dividends instead costs less tax. The saving is not as big as it used to be, given that dividends are now taxed more, but they're still avoiding employer NI, which is a 13% reduction.

It is fairly logical not to count dividends as salary for furlough purposes. Dividends are supposed to be your reward as a business owner, not remuneration for your labour.

But if my cousin had fiddled their taxes, wouldn't they 'earn' less, therefore letting them claim the grants?

Employers NI actually 13.8%.