self employment and relief during Covid thingummy. From an accountant

[chunkolini]

For anybody who is self employed and concerned about how they will get some financial relief in these weird times. I know I have been. I received this just now from the people who do my accounts. I have seen in the news that there is relief on it's way but not made much sense of how it will work and I'm not spending the day on a 'helpline' From this it looks like a simple process if you have been filing tax returns.Hopeless as I am (typical Artist) I have been paying these people to do it for me for years. It looks as though no funds will appear before June do it's not going to be much fun but things are moving. I hope this helps people to make sense of another layer of confusion
'finally after plenty of lobbying the chancellor has now released his plans for the self-employed. This will include sole traders and those in a partnership. Those who run limited companies and take dividends will not be eligible for this scheme (although they may be entitled to some salary grant as previously announced).
Overall it seems a fair way of doing things, but as with everything though it won't work well for everybody. The timing is also an issue. With the money not being available until the beginning of June there is obviously a massive cash-flow gap to fill.
To plug this gap the chancellor has suggested that people claim Universal Credit (rules have been relaxed) and if eligible speak to your bank about the Small Business Interruption Scheme. This loan scheme is interest-free for 12 months.
Here are the main headlines:

• HMRC will pay 80% of taxable profit (up to maximum of £2500 per month) averaged out over the last 3 years as reported on your last 3 tax returns.
• If you haven't been self-employed for 3 years they will take the years you have submitted. So just one or an average of two if you only have two.
• If you only started self-employment during the current 2020 tax year (so that's since April 2019) unfortunately this won't be available to you as you haven't submitted a tax return yet. He was quite clear on that.
• You also needed to have traded during the 2019/20 tax year and expect to continue into the next tax year (when you can get back to work of course!).
• Only open to those with average trading profits less than £50,000.
• The system for making a claim and payments won't be available until the beginning of June.
• They will backdate to the start of March - for an initial 3 month period from then (so payment for March, April and May)
• The amount will be paid in one lump sum.
• You can carry on trading as self-employed (which is unlike the employee version)
• If you haven't yet completed your 2018/2019 tax return you have 4 weeks from now to do it. HMRC will need figures to assess any payment.

There is nothing that can be done right now in relation to this scheme. The chancellor said that HMRC will contact you directly. They will be in touch when the systems are finally in place (again they estimate the beginning of June) and provide you with an invite to claim.
They have said that they will calculate the amount due to you based on the information they already have. So there will be no need to provide them with any financial details.'

 

[stuvy]

Sign on for JSA in the mean time to get you buy if needed, takes approx ten days to see any money and take it off next years tax bill

I only have 5 months as I was employed before going back to self employed, gutted!

 

[steviec_lj]

https://www.mig-welding.co.uk/forum/threads/covid-19-help-support.99488/page-3#post-1526169

 

[Exuptoy]

Ltd co me so no help, but currently fortunate that my services are required as a key worker in my old factory job but working for myself. Not sure how long they’ll need me but I’ll take what I can get.

 

[Revs1972]

As a director that takes minimum as a salary, with rest made up as dividends, an am on PAYE I assume I’ll be able to get the 80% of the £750 or so I take a month. (Accountant not got back to mr yet)
If that’s true, then I’m happy with that as it will cover my mortgage and bills.
Fortunately I’ve had a good year, so not overly concerned with money coming in.
Film studios have shut down indefinitely, so no work coming in from there (95% of income).
Got pulled off a job we had 25 % erected, with another one that was due to start on site yesterday (steel all fabricated)
Currently owed around £18k + VAT, as I’ve paid my suppliers, so hoping clients do the same ! One has already or it would be £35 k

might have a couple of drawing jobs to do, so will probably get them out of the way to save being overly bored, but with no promise of getting paid for them, it’s a gamble. That’s were the moral dilemma starts, do you claim for your 80% when you are working, but might not necessarily get paid for it ?

 

[eLuSiVeMiTe]

As a director that takes minimum as a salary, with rest made up as dividends, an am on PAYE I assume I’ll be able to get the 80% of the £750 or so I take a month. (Accountant not got back to mr yet)
If that’s true, then I’m happy with that as it will cover my mortgage and bills.
Fortunately I’ve had a good year, so not overly concerned with money coming in.
Film studios have shut down indefinitely, so no work coming in from there (95% of income).
Got pulled off a job we had 25 % erected, with another one that was due to start on site yesterday (steel all fabricated)
Currently owed around £18k + VAT, as I’ve paid my suppliers, so hoping clients do the same ! One has already or it would be £35 k

might have a couple of drawing jobs to do, so will probably get them out of the way to save being overly bored, but with no promise of getting paid for them, it’s a gamble. That’s were the moral dilemma starts, do you claim for your 80% when you are working, but might not necessarily get paid for it ?

Glad your positive mate
Ilm should weather this ok and stay home with the family till June if it goes that way

 

[bigegg]

As a director that takes minimum as a salary, with rest made up as dividends, an am on PAYE I assume I’ll be able to get the 80% of the £750 or so I take a month. (Accountant not got back to mr yet)
If that’s true, then I’m happy with that as it will cover my mortgage and bills.
Fortunately I’ve had a good year, so not overly concerned with money coming in.
Film studios have shut down indefinitely, so no work coming in from there (95% of income).
Got pulled off a job we had 25 % erected, with another one that was due to start on site yesterday (steel all fabricated)
Currently owed around £18k + VAT, as I’ve paid my suppliers, so hoping clients do the same ! One has already or it would be £35 k

might have a couple of drawing jobs to do, so will probably get them out of the way to save being overly bored, but with no promise of getting paid for them, it’s a gamble. That’s were the moral dilemma starts, do you claim for your 80% when you are working, but might not necessarily get paid for it ?

from what i can gather, you can claim thd 80% regardless - it just gets added to your (taxable) income.
watch you dont go over the 50k t/o, otherwise itll be repayable, though.

 

[mtt.tr]

I'll be laughing as im 100% on with my tax return. Pay more tax than most people i work with doing the same job.


I did hear plans to up self employment tax, this a double edged sword.

 

[optima21]

Sign on for JSA in the mean time to get you buy if needed, takes approx ten days to see any money and take it off next years tax bill

I only have 5 months as I was employed before going back to self employed, gutted!

JSA is a contributory benefit now and uses the two tax years that ended in april 18 and april 19. you would have to have been working on PAYE for both of these tax years to qualify and have at earned at least about £8k for each tax year as PAYE. If you were self employed you will not qualify as the class of NI contributions for SE workers don't cover you for JSA, they do cover you for ESA (Employment Support Allowance) if you are unable to work due to illness though.

the income based (means tested) element of JSA has now been replaced by Universal Credit.

 

[Kayos]

As a director that takes minimum as a salary, with rest made up as dividends, an am on PAYE I assume I’ll be able to get the 80% of the £750 or so I take a month. (Accountant not got back to mr yet)
If that’s true, then I’m happy with that as it will cover my mortgage and bills.
Fortunately I’ve had a good year, so not overly concerned with money coming in.
Film studios have shut down indefinitely, so no work coming in from there (95% of income).
Got pulled off a job we had 25 % erected, with another one that was due to start on site yesterday (steel all fabricated)
Currently owed around £18k + VAT, as I’ve paid my suppliers, so hoping clients do the same ! One has already or it would be £35 k

might have a couple of drawing jobs to do, so will probably get them out of the way to save being overly bored, but with no promise of getting paid for them, it’s a gamble. That’s were the moral dilemma starts, do you claim for your 80% when you are working, but might not necessarily get paid for it ?

As far as I'm aware you will not qualify.
Dont take my word for it but lots of builders on a fb group do the same and say they wont be getting anything

 

[Revs1972]

Glad your positive mate
Ilm should weather this ok and stay home with the family till June if it goes that way

thankfully , that’s the only worry at the moment. Spending the next few months at home with the kids will be the hardest part. Got the sparky in finishing the garage wiring on the new house, and the plumber coming to final fix tomorrow.
We may be lacking in carpets and soft furnishings up there but at least the kids will be able to run round and use the garden ( certainly better than being couped up in 2 bedroom flat !!)
Just got to sneak the beds up past the police roadblocks next week.

 

[eLuSiVeMiTe]

I'll be laughing as im 100% on with my tax return. Pay more tax than most people i work with doing the same job.


I did hear plans to up self employment tax, this a double edged sword.

Ditto mate sole income i couldn't lose it if I wanted to

 

[mtt.tr]

Ditto mate sole income i couldn't lose it if I wanted to

I personally think this will cost us all more longterm to the point employment would be a better option.

 

[eLuSiVeMiTe]

I personally think this will cost us all more longterm to the point employment would be a better option.

Employed by who. That's the question.
Gonna be a trying year regardless.

 

[gaz1]

Sign on for JSA in the mean time to get you buy if needed, takes approx ten days to see any money and take it off next years tax bill

I only have 5 months as I was employed before going back to self employed, gutted!

there is no jsa its known as jsa cc nowadays and it takes 5 weeks to get anything same as universal credit

if you do sign on read your cc very carefully before signing it as it does come with restirctions and is highly sanctionable

you can get an emergency loan but note it cripples you on repayments ive explained more on the other post

 

[Craig-SM]

As a director that takes minimum as a salary, with rest made up as dividends, an am on PAYE I assume I’ll be able to get the 80% of the £750 or so I take a month. (Accountant not got back to mr yet)
If that’s true, then I’m happy with that as it will cover my mortgage and bills.
Fortunately I’ve had a good year, so not overly concerned with money coming in.
Film studios have shut down indefinitely, so no work coming in from there (95% of income).
Got pulled off a job we had 25 % erected, with another one that was due to start on site yesterday (steel all fabricated)
Currently owed around £18k + VAT, as I’ve paid my suppliers, so hoping clients do the same ! One has already or it would be £35 k

might have a couple of drawing jobs to do, so will probably get them out of the way to save being overly bored, but with no promise of getting paid for them, it’s a gamble. That’s were the moral dilemma starts, do you claim for your 80% when you are working, but might not necessarily get paid for it ?

If you mean that you take a salary of £750 per month then the Job Retention Grant will be used to pay 80% of those wages costs assuming you are going to carry on putting through the £750 salary so that you are covered for NI contributions.

 

[Revs1972]

I personally think this will cost us all more longterm to the point employment would be a better option.

they are certainly going to be making all this back and then some in the future.
It’s a bit like when a group of you go out for a meal and split the bill. Some won’t have very much at all, some will have what they would normally have , then some will pig out and fill their fat faces with the most expensive dishes and the finest wines , knowing that they will end up paying the rest as everyone else and getting a cheap deal. I always take the centre route, sometimes veering towards the left.

 

[Revs1972]

I was watching Martin whatshischops money man on the telly last night.
He mentioned that he had a friend who had been laid off during the week.
He had advised them to get their employer to take them back on , so that they could be put into furlough . Something tells me that basically he has admitted on national telly that he told his friend to commit fraud ???

 

[hotponyshoes]

I was watching Martin whatshischops money man on the telly last night.
He mentioned that he had a friend who had been laid off during the week.
He had advised them to get their employer to take them back on , so that they could be put into furlough . Something tells me that basically he has admitted on national telly that he told his friend to commit fraud ???

It's not really fraud if they had been laid off due to the company not being able to afford them.
If the 80% means the company can now afford to employ them again then the jobs is there again.

 

[MoreWellie]

I personally think this will cost us all more longterm

All the money will be paid by the uk borrowing money so there will be a payback period once things recover

I heard this week that the country has only just finished (2 years ago) paying off what we borrowed to get through the 2nd World War

What confuses me is that as most countries will be in the same horrible boat (cruise ship?) who do we borrow from???? Guess that is why I am not running the country