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?

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.

The ignorance in this statement is just mind blowing. Any dividends are paid after corporation tax, and then taxed via dividend tax in your tax return. So hardly tax free ffs.

www.contractorcalculator.co.uk/comparing_taxes_contractors_versus_employees.aspx

www.gov.uk/tax-on-dividends

@DoubleDessertPlease It's actually comical. Jesus, do people think that?!

The self-employed have been offered more than enough
In my case, absolutely zero.

What is unfair, is low paid workers who haven’t stopped throughout the pandemic more than likely being faced with tax increases
Why hasn't anyone given a toss about the lower paid workers before?
I imagine all tax papers will bear some brunt of this, especially the lower to middle because they don't have the option of loopholes like the ultra rich, the celebrities and the large corporations.

The self-employed have been offered more than enough.

Millions of the haven't been offered anything, millions haven't had an income since April and you think that's enough ?

We'll, regardless of our personal, medical, educational, skill levels and geographic placement we could have got off our collective added and started a new job the minute we realised, with our self employed crystal balls, that this nasty little cold would last for a year or more.

Cos it's plainly unfair that we, tax dodging, skill less, non revenue generating scum bags should think that we need or deserve any support.

Meanwhile, back in the real world, I am watching everyone I network with discuss different beats if working, magicians (real ones) work online, SM experts share their usually paid for skills so that others can start to work on line (lots of bartering and promise of future recompense). Those who, like me, have to go out, I have to go into people's homes, got together online to discuss insurances, covid safe procedures and took what work we could. Some didn't take the second furlough as they didn't need it, but did need the first and will need the next one or two.

We have done everything we could to keep working. But, as far as we discussed the week before Christmas, lost between 30 and 100% of our income each and every week since lockdown started.

But we all remain aware of the inequality and, for some, the utter devastation this hase caused. Not just losing a van or a tool box... but whole families losing everything, including lives.

We are as human as anyone on PAYE! The attitudes of some here are disgusting - sadly mirrored by many in real life!

The people I know who work in theatre have all found all sorts of other jobs though? Amazon drivers, Tesco drivers, office admin etc. They aren't just sitting around waiting for their dream job to come back

For the last 10 years DP has earned most of his money from behind the scenes at festivals and concerts. We all know how that has gone this year and is likely to be for the near future.

He applied to all the supermarkets back in March. He heard nothing from any of them, apart from Tesco, who came back to him in September asking if he was available for a telephone interview.

But because in the qualifying years he was on PAYE for one of his main clients, he's another one who's been entitled to nothing from SEISS or any other avenue. Just about everyone he knows in the industry is in the same position. We're fortunate that I'm the main earner and have been working and paid in full throughout. DP has also managed to get some work as a labourer on a building site, so we're fine.

But many aren't and its just the blind refusal to listen, empathise or overturn the blatant inequalities that's so frustrating. On the matter of the £51k, some of those people will have been the main or only earner supporting a family and if those families lived in expensive areas of the country, exactly how much spare money do you think they've had over the years to save to support themselves in such an extended period with no income, in addition to paying housing and other costs?

@CrazyCatLover

The self-employed have been offered more than enough. Care homes etc are crying out for staff, if you are in dire straits financially then you have to do what you have to do to survive. No point sitting around moping about it.

What is unfair, is low paid workers who haven’t stopped throughout the pandemic more than likely being faced with tax increases to compensate for all the excess furlough and grants handed out so ending up worse off for working.

Do you think being offered nothing is "more than enough"? I applied to work in care and in retail in March - along with thousands of other people in the same position as me. I got rejected from every single job I applied for. It's not like I sat on my arse twiddling my thumbs.

Luckily my business picked up again in June and I've not needed to search for any other work, but I did have three months with zero income. Fortunately DH was still able to work.

How low paid workers have or haven't been treated is largely irrelevant - you can support the self employed and lower paid workers too. Also, everyone will be faced with tax increases when this is over - why do you think care or retail workers should be exempt from that?

@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.

Self employed people are not able to do this. Self employed people will be taxed on their profits in the same way as an employed person would be.

You are confusing self employed with people that have set up and own a Ltd company. In that case the individual is not self employed but is employed by the Ltd company. In this case, yes some will downplay salary and pay more in dividends which are taxed at a a lower rate. Although not as lucrative as it used to be, but would still be beneficial for most.

OP I agree there should be more support for the self employed who can prove their income and tax paid. It's irrelevant how long they were self employed and there should be no cut off. It should operate similarly to the furlough scheme and be capped, but be based on normal average earnings, which can easily be worked out by tax paid to avoid fraudulent claims. If someone paid themselves a low salary and took dividends well that unfortunately entitles them to less than they're used to, but that is also the case for anyone earning over £30k who's employer has furloughed them.

I wish people would stop perpetuating the hatred for the furloughed. The furlough scheme is nothing to do with individuals, it is to support businesses. Those on furlough have no choice in the matter, and they don't claim the money, their employer does. Plus the employers can only claim up to £2500 per month (or £30000 per year), which is not great if you earn more than that. Furloughed people are rightly not asked to live off their savings because the scheme is nothing to do with their personal circumstances, it's all about supporting businesses. So if anyone should be asked to 'live off their savings' it should be businesses. However many have done so in addition to utilising the furlough scheme just to stay afloat. But once the money is gone they may well go bust, and everyone will lose their jobs. The furlough scheme aims to stop that from happening.

Perhaps the government should have offered no support as the push back from businesses and individuals would have forced them to act far more decisively than they have. Continuing to throw money into the pit they are still digging only makes the situation far worse in the long run.

@Dreamscomingtrue

Comparisons of taxes paid

This simply clarifies again and again how shafted the average employee is! More tax etc. Less covid assistance. Certainly doesn't make me pity those who have benefitted from lower taxes all of these years. Nor does it show the situation as it really is, which is that many wouldn't have been taking the 35k as income so actually wouldn't have paid anywheres close to those tax totals to start with!

CrazyCatLover
The self-employed have been offered more than enough.

eh? what? Example please.
Tell me what a self employed classical musician who's gross income was £51k has been offered. They have savings of £18k ready to pay their tax bill in Jan, and are managing to earn £10k currently.
You may not include UC, SEISS, or local grants.

Part time music teacher earns £19k salary
also earns £26k as a freelance musician
and £8K renting out a house to a settled family

due to COVID they lose the £26k
but because but is less than 50% of their total income
THEY GET NO GOVERNMENT SUPPORT AT ALL

listeningquietly
hugs. It's so hard.

It's SO unfair. If you'd worked less, you would have got the SEISS grant. But because you worked bloody long hours, teaching AND playing, you've got nothing.

Dh is/was a West End musician. He did a few more shows than his colleagues and so gets no SEISS. If he'd taken more time off his show, he would be ££££ better off now.

Lower taxes... And no sick pay etc etc.

At least try and understand what the real situation is before spouting yet more half baked misunderstandings.

If you're self employed then you can claim furlough. It's done in means tests, so if your friend has over a certain amount in her business account she isn't entitled to furlough.

It's got nothing to do with personal savings. It's all about what's in their business accounts.

PAYE don't have business accounts. That's why they aren't means tested

@lilylongjohn

If you're self employed then you can claim furlough. It's done in means tests, so if your friend has over a certain amount in her business account she isn't entitled to furlough.

It's got nothing to do with personal savings. It's all about what's in their business accounts.

PAYE don't have business accounts. That's why they aren't means tested

UTTER RUBBISH

Furlough is for employees

Self employed are NOT employees

SEIS grant is related to taxable profit NOT bank balance

@houselikeashed - where savings are for a tax bill, you can pay it early then claim universal credit.

@ListeningQuietly - do you really think the average care worker on £17k/yr or retail assistant on £14k/yr should feel sorry for the reduction to £27k of the music teacher? It's very close to the median UK salary of £31.5k, for only working part-time. Of course it's disappointing to lose a portion of income for a period of time, but a teacher could certainly have picked up bank work as a teacher to make extra. Or back in lockdown some online tuition to keep kids occupied while parents work would have been lucrative.

lilylongjohn
Sorry, but that is not correct.

1. Self Employed workers have to apply for the SEISS scheme, not Furlough.
2. Many sole traders do not have business accounts.
3. If their gross earnings are usually over £50k ten they cannot claim.
4. Most self employed people have to save up to pay their tax bills in Jan and July. That is when HMRC collects tax from self employed people.

Another example
Actress who supplements their income with waitressing

Last filed tax return
Acting income £20,000
Waitressing income £20,001

Due to COVID, waitressing job on furlough
Due to COVID, acting stops completely

but NO GOVERNMENT SUPPORT because of the 50% rule

If you're self employed then you can claim furlough

Can you now? From who exactly?

Furlough is for employees. Self employed people don't have an employer, so no-one to furlough them.

People who are employed by their own limited company may be able to furlough themselves, but in most cases the amount they can claim is a tiny amount of their usual income, nowhere near £2.5k pm.

Self employed people over 40 who have been sensible and built up ISA savings cannot claim UC

Employed people with savings still get Furlough money

Mrex
Or back in lockdown some online tuition to keep kids occupied while parents work would have been lucrative.
Bollocks it would.

Parents on reduced incomes themselves were not paying out for tutors

and schools and the BBC were providing tuition for free

@lilylongjohn

If you're self employed then you can claim furlough. It's done in means tests, so if your friend has over a certain amount in her business account she isn't entitled to furlough.

It's got nothing to do with personal savings. It's all about what's in their business accounts.

PAYE don't have business accounts. That's why they aren't means tested

You can only be furloughed if you're an EMPLOYEE.

This post has made it quite clear that you have no idea what you're talking about, btw.

MRex
It is the current earnings that bar us from UC. Our online teaching has continued and indeed increased, but it does not cover our mortgage payments.
Think of it as being employed, but your employer cuts your hours down by 80%. You can't claim UC because you still have an income.

It is not about asking people to feel sorry for us, but about asking people to understand how the system is not fair, and that people are struggling to make ends meet.

You can't just sell your house, or change career overnight. When you are say 55 years old, with no other work experience other than playing a musical instrument, it is difficult to find a job which pays enough to cover your bills.

@ListeningQuietly - o.think you may be confused; the £20k waitressing furlough is government support, it's literally paid by the government. It's also very clear now that you're just making up scenarios, which will just lead to confusion.