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Original poster

living off savings for 16months

233 replies

wheresmymillionaire · 26/12/2020 13:06

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?

OP posts:
Dreamscomingtrue · 26/12/2020 13:30

Sorry my last post was too small to read. Look at taxes paid, there is NOT much difference between PAYE, sole trader or Ltd. company Director. It’s a myth that dividends are tax free.

living off savings for 16months
vanillandhoney · 26/12/2020 13:31

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.

Ugh. Again, it's not only people who've paid themselves in dividends who are losing out here. Anyone who is newly self-employed (eg. within the last 2-3 years) get absolutely fuck all, regardless of how much tax they paid in that period.

DH and I are both self-employed and pay tax on our earnings. However, we only became self-employed in the last eighteen months, so neither of are eligible for any help. Luckily DH's work hasn't been compromised so we're not struggling, but my business has taken a hit.

Before going self-employed, I worked in PAYE jobs for 15+ years and paid my taxes like everyone else. But I still qualify for nothing.

Original poster
wheresmymillionaire · 26/12/2020 13:31

They are just actors, not companies.

OP posts:
SpaceRaiders · 26/12/2020 13:32

This thread goes to show just how little people know about how self employment works.

I wonder if the tax rises in the coming years will be targeted on those who did receive support. I doubt it!

satnighttakeaway · 26/12/2020 13:32

@MaskingForIt

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.

How does that work? By definition a self employed person hasnt got anywhere to get dividends from

Are you confusing then with company directors? But even then how would they be getting dividends free of tax?

Could you come back and explain please.

The system certainly isn't perfect, lots of people have fallen through the gaps in the past 9 months.

SheSaidNoFuckThat · 26/12/2020 13:33

@MaskingForIt

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.

Untaxed dividend!! In what world?!?! My accountant must be doing it wrong then 🙄
RandomLondoner · 26/12/2020 13:36

In theory, furlough support does not exist to help any individuals. It's a scheme to help businesses survive a period of disruption.

The scheme that is their to help individuals is Universal Credit. No reason why that should be any different in COVID times to any other time. (Whether it's enough at any time is a different question.)

On that basis, not sure why self-employed people get anything, other than as a political sop. Not against self-employed scheme, just think its existence is not entirely logical.

mrsjoyfulprizeforraffiawork · 26/12/2020 13:38

I'm a self-employed person. I think it is fair (I have never earned anything like £51k but, if I had, I hope I would have been able to put away sufficient to tide me over the lean times, which most of us self-employed have to budget for). In fact, I have only claimed the first instalment of the SE grant as, in all honesty, I started to get a little bit of work which is equivalent to what I would usually be getting over the beginning of winter, so things are currently no different from usual for me as I often get very little work in winter. I really didn't expect the Government to be able to afford to pay SE people as well as do the furlough scheme for PAYE people, so I am grateful for the generosity. Obviously, they have to draw the line somewhere and the income cut-off point seems fair to me. I am, however, really sorry for the people who recently set up as self-employed and simply haven't worked that way long enough to have made the required number of tax returns (that prove their level of average annual income) to claim the benefit.

SpaceRaiders · 26/12/2020 13:43

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’s perfectly legal, HMRC allow it and the difference between PAYE and Self Assessment tax is minuscule. Hmm

SnowyZoey · 26/12/2020 13:47

I think it’s fine if people who can afford to save are asked to spend them. Why should people get benefits if they don’t need them?

It’s not ok if you can’t get anything and are skint. But 16k savings? You’re not on the breadline!

dontdisturbmenow · 26/12/2020 13:51

It’s perfectly legal, HMRC allow it and the difference between PAYE and Self Assessment tax is minuscule
Which I said. Perfectly legal but still a choice that people make to save on the 'minuscule' difference.

I thought anyone could claim the grant as long as they could show a few months of operation. I didn't think it had to be over 18 months. If that's the case, I agree that is unfair. 12 months, maybe 6 months with evidence of reasonable turnaround would be fair.

Original poster
wheresmymillionaire · 26/12/2020 13:52

But why aren't furloughed workers who earn over £50k asked to live off their savings?

OP posts:
InTheLongGrass · 26/12/2020 13:53

There are a couple of business sectors that have been utterly screwed for the past 9 months.
The fact that some sort of net was put in place quickly that caught the majority of people was great. But the longer this goes on, the smaller those holes should have become instead of chucking the same net each time.

vanillandhoney · 26/12/2020 13:53

@SnowyZoey

I think it’s fine if people who can afford to save are asked to spend them. Why should people get benefits if they don’t need them?

It’s not ok if you can’t get anything and are skint. But 16k savings? You’re not on the breadline!

So why doesn't that applied to workers on over 51k? They still get up to 2.5k a month.
Sobeyondthehills · 26/12/2020 14:00

Over 3 million people got screwed over in this, getting nothing over the last 9 months both self employed and employed and despite a number of campaigns nothing has been done.

Then once you get the hope of UC, alot of people don't seem to understand (because they don't know the system) that they have to wait another 5 weeks. Even if your cousin is not entitled to anything now, get the ball rolling on it.

The whole industry was fucked over, a lot of people in the entertainment business are self employed and were not entitled to anything, my family member got lucky and managed to get some work from June onwards, but they have friends who are on their knees at the moment.

SnowyZoey · 26/12/2020 14:02

I’m sorry but people with 16k to spend are not the worst off.

People with nothing are.

m0therofdragons · 26/12/2020 14:02

It’s hugely unfair for some. My friend plays cello in orchestras but also earns £8k a year as a music teacher providing her a stable basic wage. Clearly her orchestral work is her main income but due to teaching job she cannot claim the grant. There will be many people with more than one income who will not be able to claim but for those not affected it’s easier to believe that everything is fine.

CuriousaboutSamphire · 26/12/2020 14:03

It turns out it is pointless trying to have this discussion. Too many people just don't want to understand how self employment, sole traders work. It's far easier to believe all the DM hype than the truth.

So I'll repeat the salient question:

Why is it OK for an employee earning more than £51k to get furlough payments but not anyone who is self employed?

Original poster
wheresmymillionaire · 26/12/2020 14:05

why are people saying they have £16k to spend? They are also worried about having to pay their tax bill in Jan.

OP posts:
userxx · 26/12/2020 14:06

@wheresmymillionaire

But why aren't furloughed workers who earn over £50k asked to live off their savings?
It's a very good question isn't it.

Unfairly slanted towards the employed.

Butchyrestingface · 26/12/2020 14:07

Why is it OK for an employee earning more than £51k to get furlough payments but not anyone who is self employed?

It's not. It should be both or neither.

In reality, it should be both. Nobody other than the very rich has enough put by for this sort of scenario.

SpaceRaiders · 26/12/2020 14:07

Which I said. Perfectly legal but still a choice that people make to save on the 'minuscule' difference.

Do you pay more than legally stipulated in tax?...Thought not.

The fact is, once again the government has chosen to exclude an entire section of the economy. It’s completely short sighted, these small businesses will be pivotal in getting the economy out of this crisis.

vanillandhoney · 26/12/2020 14:07

@SnowyZoey

I’m sorry but people with 16k to spend are not the worst off.

People with nothing are.

So surely you should be arguing that anybody with over 16k in savings gets nothing, even if they're employed and on furlough?
Jangle33 · 26/12/2020 14:08

@CuriousaboutSamphire you need to read @RandomLondoner excellent post above -

“ In theory, furlough support does not exist to help any individuals. It's a scheme to help businesses survive a period of disruption.

The scheme that is their to help individuals is Universal Credit. No reason why that should be any different in COVID times to any other time. (Whether it's enough at any time is a different question.)

On that basis, not sure why self-employed people get anything, other than as a political sop. Not against self-employed scheme, just think its existence is not entirely logical.”

I think we are going to see a lot of people realising that not being an employee is not as desirable as it once was. With furlough and IR35 changes.

Butchyrestingface · 26/12/2020 14:12

I think we are going to see a lot of people realising that not being an employee is not as desirable as it once was. With furlough and IR35 changes.

I never seen as self-employment as 'desirable'. I am self-employed because that is the way my industry works and over 90% of workers in this industry ARE self-employed. If a salaried employment opportunity had ever come up, I would have bitten hands off to get it. It's even less likely to happen now.

And retraining for another profession - in THIS climate??

Luckily, I have been able to continue to work from home, and pay tax, but I have colleagues who joined the industry too late to benefit from the SEISS grant.