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?

jangle I did read it and was not sure I understood the point being made.

It seems to suggest that no self employed person adds anything to the economy, supports an business in any sector, is of any Earthly use to anyone.

There are many self employed people, sole traders and otherwise, that offer services that are essential to other businesses.

So I am waiting till see how that poster explains their take on it....

My DH can’t claim anything because his earned income isn’t less than 50% of his earned income. He has a small pension which means that it takes him out of the eligibility criteria.

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.

In lots of industries, there isn't a choice. You have go to go self-employed or work as a freelancer - the employment opportunities just aren't there.

I'm in animal care (I run a dog walking business) and I tried for years to get an employed position but they very, very rarely come up and when they do, they get hundreds upon hundreds of applicants. Getting an employed position proved to be impossible.

Yes there are a lot of industries such as gig economy, media and arts where self employment is not a choice. There would be no work otherwise given how those industries are structured. But there are also a lot of people eg IT consultants etc who have foung a significant financial benefit from self employment. Means testing furlough is difficult as of course it penalises those who have been prudent and saved. Politically means testing for regular benefits doesn’t belong upset the Tory voter base as much

We both lost our jobs because of the pandemic and have been living off savings since June.

But there are also a lot of people eg IT consultants etc who have foung a significant financial benefit from self employment.

But there are also different benefits in being employed. It's very much swings and roundabouts in that respect (pre-COVID, that is).

To me, it just seems incredibly unfair that anyone in employment was guaranteed help, regardless of how much tax they'd paid over the years, but you had to be self-employed for at least two years to qualify for anything at all. I don't know how people can argue that that's fair.

Unfortunately there are so many different criteria and there will be some people who slip through the gaps.

My husband lost his very well paying job in March and we were abroad and had to come home so no furlough.
His UK company had transferred him out but made him sign a new contract so no redundancy pay and screwed him out of anything by threatening not to repatriate him while airports were closed.
We have just over savings limit from the sale of our flat and saving every penny while away (still lost a significant amount).
He qualified for new job seekers (£75 per week).
No child benefit as they took 6 months to make a decision as to whether we qualified after being out the country for 6 months out of 28 years.
I started work as a registered nurse when my baby was weeks old so we could afford food and rent. Because it was 2 weeks after cut off I don't qualify for the £500 nhs worker bonus (been working since April so I would say through the pandemic!).
Now that we are back on our feet we are having to find 15% deposit to buy anywhere as obviously dont qualify for any government schemes such a HTB having previously owned (and made a loss on) a property.

We have been employed since we were both 16 and have certainly feeling a bit irritated around the amount that people in better circumstances than us have qualified for so certainly not just the self employed.

I think that there is an element of frustration in the government and that someone like an actor who has no prospect of proper work for the next few months if not years should, given the situation, switch careers to something like care work.

I don't necessarily agree but if your self employed business hasn't made any money for nine months is it worth continuing to pursue?

The same could, of course, be said for many businesses.

Personally I'm hoping the shows will open up again and he will be able to go back to working. They will have no emergency savings by then though. It just seems so unfair. Why not have the same rules for everyone? 80% of your income if your work has to shut?

@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!

You're right, but in some cases it's a real shame. I know a self-employed young couple who don't qualify for any help, but couldn't claim UC as they have savings. These savings were to be their house deposit to get on the "property ladder", but they have to have £6,000 or less before they can claim UC. They are having to use their savings to live on, so will be down to £6,000 in no time - dreams of owning a home gone for now. I don't recall if any other posters have mentioned this, but there is a not-for-profit voluntary organisation called ExcudedUK, who are campaigning for people who have fallen through the cracks in terms of government Covid help.

Do you pay more than legally stipulated in tax?...Thought not
I'm not trying to find away to pay less. Directors are welcome to pay themselves a salary that represents their role and pay taxes as stipulated in tax.

I don't know how people can argue that that's fair
The two year period is unfair. The rest isn't.

@RandomLondoner

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

Not if your self employed income was more that £50,000 No tapering just no claim

I think folk on here should take a look at ExcludedUK.

3 million people have been left with no support since March.

I love how people assume that the SE fiddle their taxes. Really love that.
I have always paid 20% of what I earn from the very first penny I earn. Until last year I didnt even bother sorting out a tax rebate. I didnt have the knowledge to sort it out, and was fearful if make a mistake. Better to overpay than underpay I thought.

Only reason I havent had government help was because I used Tide for my business banking, and they literally never let me apply for the grant that was going through the banks. I did see a way through, but honestly, I think there are quite a few people who overpay their tax instead of under pay, the stories of the tax man doing their checks on returns was enough to break me out in a sweat for years.

@dontdisturbmenow

I don't know how people can argue that that's fair The two year period is unfair. The rest isn't.

So so you think it's fair that someone who is employed and earns over 50k is still able to access 2.5k each month, but someone who is self-employed and earns the same amount gets nothing?

How does that work?

The other way of looking at this is to say it’s incredible the government has offered any furlough at all. It didn’t step in a similar way in the financial crisis of 2008 or countless other times. There is a benefits system which was good enough for those people who have been made redundant before . I obviously think that the furlough was completely the right thing to do but it does scare me how we are all going to pay for this and how little oversight of the scheme there has inevitably been from HMRC.

Pity though that this might not change the mindset of this country... we are mortgaged up to the hilt, new flashy cars on finance, no savings to speak of...I’m sure I’ve read we have the most debt per capita of anywhere in Europe. Clearly that this won’t change anything but there had to be a limited somewhere to the furlough but it’s sad some low earners lose out. I have no sympathy for higher earners at all. I think the £50k limit is sensible although should have been extended to employees too (though political suicide for the Tory shires!)At 50k per year you can have cut your cloth to have reasonable savings given it’s double the national average.

Didn’t the Chancellor say a scheme for the self employed was open to fraud - what a joke when over £3 billion has been fraudulently claimed in furlough payments by companies. It was also apparently “too complicated”. When he has access to the best financial brains in the country, that’s quite concerning tbh.

It seems to suggest that no self employed person adds anything to the economy, supports an business in any sector, is of any Earthly use to anyone.

No, that is exactly missing missing my point, which is that funding is nothing to do with the worthiness of individuals or the general economic usefulness of their contribution.

99% of self-employed will essentially be selling their labour, like employees. A period without sales revenue won't cause them to go out of business forever. This is in contrast to a large business with hundreds of employees, making payments of hundreds of thousands a month on property leases and capital equipment financing, who if they go bust will be out of business forever, the equipment sold off for next to nothing or possibly scrapped, the buildings recycled to some other purpose. It's these more complex businesses that the furlough scheme wants to keep alive.

A tradesman with a van and some tools might, at worst, lose his van. But that's not going to stop him restarting his business in normal times, so his business doesn't warrant the same kind of extraordinary intervention. (Reiterating, furlough is not there so individuals are looked after, it's there so businesses still exist when normal times return.)

It doesn't help people's confusion that the government (understandably) doesn't turn down all the credit it gets from furloughed workers, even though helping them is a means to an end and not an end in itself.

Really? You think that???

Mind boggling.

if your self employed business hasn't made any money for nine months is it worth continuing to pursue?
As a therapist, my work is with those with cancer, those with severe disabilities and those with extreme learning difficulties. My industry is sole trader only, no employment. Falling under the close contact category, it was one of the first things to shut, and the very last to open. How do you propose I make any money this year?
I've only been open 19 months, 1 set of accounts = no help, even though I did pay tax last year. Also paid tax for the 20 years as PAYE before that.
Not like there is an abundance of jobs one could just get either.

Oh and to add. I am not allowed to work even though I help people in pain, which stops them using NHS resources.
Mumsnet can have their cleaner round still though, as they're allowed to work. Bonkers.

The ignorance and misinformation about self employment and taxes in this country is depressing but very prevalent.
We have a small business in the creative sector that usually just employs DH and I but occasionally expand to employ several freelancers on certain projects.

1. Dividends are taxed, at a much higher rate than they used to be and sometimes they dont exist!

2.We also pay corporation tax, which employed people don't. 3.we generate and collect VAT for the government. 4.most companies in our sector insist on us being a limited company or they won't work with us, especially if intellectual property is involved. 5.We don't get the same benefits like paid holidays and sick pay, as an employee on an equivalent salary. 6.No company pensions, hence having to save for our old age. 7.We provide employment. 8.All the little loopholes that allowed a few unscrupulous types to run what our accountant called "lifestyle" companies havr closed or are only available to the super rich. 9.the image of the dodgy builder doing cash jobs or the IT consultant with a hefty contract working for one company are out dated. 10.savings are used to pay tax and vat bills, what's going to happen when they are due?

A period without sales revenue won't cause them to go out of business forever
How do you know that? How do you propose these people pay their bills in the meantime with zero income? The mortgage, council tax and utilities don't stop. When someone has to sell everything they have, whether it be those tools or that van, or their house, it is very likely they won't be able to go back to that trade.