Self-employed & Coronavirus

[Bluesince1979]

That seems to suggest that we can claim 80% of the salaries we take through PAYE which for most is about £8k (on advice). Not much then.

I dont pay myself any dividends, just a salary. Which is great, but my understanding through this job retention scheme is that i would gave to furlough the company. Which if i did that id have no company to come back to

 

[Cheesy]

I dont pay myself any dividends, just a salary. Which is great, but my understanding through this job retention scheme is that i would gave to furlough the company. Which if i did that id have no company to come back to

Unfortunately, that's correct.

A strict condition of furloughing is that you don't do any work at all. Which is impossible if you still want a business.

 

[Bluesince1979]

Why did you close the company?

A large percentage of my work is inside houses, carpet and floor cleaning/care. So thats a no.

I also do outside work but decided there was a lot of negative feed back about people going about there business. Also, is it a good idea to be out n about everyday? Am i helping stop the spread of this virus ? No.

So i closed up believing help would be on its way

 

[sir baconface]

Seeing the concerns of many on here, and other social media channels, who don’t qualify as they’ve either recently set up their business, or are the sole director of a company, then surely Sunak’s claim that “95% of people who are majority self-employed will benefit from this scheme” seems improbable to me.

Me too. The IR35 reforms (now deferred) were to affect loads of so-called service companies. Many are IT contractors and other types of contractor or consultant. These are the people who seem to be overlooked by both the employed and self-employed measures.

If there are so few of them, why were such they a big deal to HMRC a month ago?

Maybe it’s a case of the government applying its own (ill-targeted) version of karma.

I’ve no particular axe to grind; more an interested observer.

 

[sir baconface]

Can anyone clarify on this? If, as a lone director you earn just over £8k through PAYE, and the rest through dividends, do you literally qualify for nothing as it stands?

Or, at the very least, will you get 80% of the £8k pro-rata? Apologies if I’m missing something, feels like a lot to take in at the moment.

To the best of my knowledge it would be 80% of £8k pro rata if able to furlough yourself (still not certain); otherwise diddly squat.

Depending on industry sector, VAT status, etc, your company might possibly gain from other grants, reliefs or deferrals.

 

[sir baconface]

I imagine the Government’s logic is that you paid yourself mainly in dividends in order to escape paying NIC. Hence only the salary element will be protected.

That's fair though, isn't it ?

Yes, in terms of the dividend element.

No overall, if the furlough restrictions turn out to rule out protection of even the salary element. If so, this group would arguably be disadvantaged against almost all others.

 

[Chris in London]

I imagine the Government’s logic is that you paid yourself mainly in dividends in order to escape paying NIC. Hence only the salary element will be protected.

No, the government’s logic was that we’re all in this together.


Even if you took money out of your company in the most legal and tax efficient manner.

 

[hello]

Just had email off revenue confirming tonit

So they tell you how much you receive then you have to apply for it ?

Doesn’t look like it, they simply open a means to apply in June, you can also lay yourself off via job retention scheme and come back to a non existent job when the company folds with its sole director prohibited from working.

full text from Jim Harra


Dear customer,

The Chancellor, this evening, announced a new Self-employment Income Support Scheme to support self-employed people who have been adversely affected by COVID-19.

GOV‌.UK has further details about who is eligible for the scheme and how it will work.

Self-employed people do not need to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible customers by the beginning of June, inviting them to apply.

Unfortunately, we are aware of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond.

HMRC will never contact you out of the blue to ask for these details.

The government has also introduced the following help for the self-employed:

• Deferral of Self Assessment Income Tax payments due in July 2020 and VAT payments due from 20 March 2020 until 3‌0‌‌ June 2020
• Grants for businesses that pay little or no business rates
• Increased amounts of Universal Credit
• Business Interruption Loan Scheme
• Directors of their own company paid through PAYE, may be able to get support using the Job Retention Scheme.

We will continue to share the most up to date information directly with you as it becomes available.

Yours sincerely

Jim Harra

First Permanent Secretary and Chief Executive – HMRC

 

[flook]

Seeing the concerns of many on here, and other social media channels, who don’t qualify as they’ve either recently set up their business, or are the sole director of a company, then surely Sunak’s claim that “95% of people who are majority self-employed will benefit from this scheme” seems improbable to me.

Clever words by Sunak, directors are not self employed so he's correct in what he says

Can anyone clarify on this? If, as a lone director you earn just over £8k through PAYE, and the rest through dividends, do you literally qualify for nothing as it stands?

Or, at the very least, will you get 80% of the £8k pro-rata? Apologies if I’m missing something, feels like a lot to take in at the moment.

This is the best you can hope for, but it's still shrouded in mystery. I keep saying it, but there will be no certainty until the treasury confirms the details. I'm stopping thinking about this until my accountant tells me what I can do.........probably

I dont pay myself any dividends, just a salary. Which is great, but my understanding through this job retention scheme is that i would gave to furlough the company. Which if i did that id have no company to come back to

I don't believe this to be correct, you will be able to (as I understand it) still do what needs be done (ie chasing creditors, paying bills, seeking work etc) whilst furloughed, but you cannot do any fee earning work. Again though, the devil will be in the detail when it emerges

 

[hello]

Me too. The IR35 reforms (now deferred) were to affect loads of so-called service companies. Many are IT contractors and other types of contractor or consultant. These are the people who seem to be overlooked by both the employed and self-employed measures.

If there are so few of them, why were such they a big deal to HMRC a month ago?

Maybe it’s a case of the government applying its own (ill-targeted) version of karma.

I’ve no particular axe to grind; more an interested observer.

maybe I am a cynical twat but I reckon ir35 deferment was for their benefit not the consultants. If people switched to ir35 in April wouldn’t they be able to furlough the contracts in event of shutdown/suspension from next week? Or is IR35 purely about additional tax revenue and no extra assurances at all? (I’ve not looked at the details of ir35 for a few years as my public bodies have said outside)