Self-employed & Coronavirus

[sir baconface]

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.

“All in this together” is a philosophy, not a logic.

 

[Chris in London]

“All in this together” is a philosophy, not a logic.

it’s neither.

it’s a lie.

 

[blueinsa]

Well after the news from the chancellor that directors of new start up ltd companies like me will get sweet fuck all i reopened my online stores last night, took orders and this morning i will not be staying at home i will be out sourcing stock, interacting with warehouse workers in doing so and the Royal Mail will collect those orders, something they wouldn't have had to do.

I either risk losing our home and having no money for food and bills or i risk catching covid-19.

Some choice to have.

 

[sir baconface]

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)

The effect of IR35 reform would be to switch a number of people from limited companies (with the facility to take pay in dividends) to straightforward PAYE. In theory at least, that would make furloughing easier.

You could be right or it might be that admin will already be too stretched. Or possibly both.

 

[tolmie's hairdoo]

I had a call last night after accountant did some more reading up. They are pretty sure I will be entitled to the scheme which pays up to 80 per cent of salary on the PAYE scheme.

It is a grey area in the scheme but you can still work on your business as a director. Including all the things you will still be doing, chasing and submitting invoices, doing the books, payrolls and chasing down new work on behalf of your business.

Essentially, I would still bring money into the business as normal (working in truth) but that is through my efforts as director, keeping the business going, so the money I could get as a perceived furloughed employee would be applicable.

 

[OB1]

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)

IR35 is all about getting more tax revenue by removing the tax & NI benefits people who are "self-employed" (through their own company) get tax & NI wise when acting like employees. On one hand it does seem an unfair advantage but there's also a whole load of extra risk for contractors, who do provide a benefit to the economy by providing flexibility in the workforce.

 

[OB1]

I had a call last night after accountant did some more reading up. They are pretty sure I will be entitled to the scheme which pays up to 80 per cent of salary on the PAYE scheme.

It is a grey area in the scheme but you can still work on your business as a director. Including all the things you will still be doing, chasing and submitting invoices, doing the books, payrolls and chasing down new work on behalf of your business.

Essentially, I would still bring money into the business as normal (working in truth) but that is through my efforts as director, keeping the business going, so the money I could get as a perceived furloughed employee would be applicable.

I think that is what a lot of "self-employed" directors will have to do. I think that will be fine so long as you are not actually trading in the sense of delivering services etc to clients; unless they make a relaxation in the rules to be more like self-employed.

The problem for all those on £8k salaries is that it will not amount to much.

 

[Ban-jani]

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.

I had 60 working for me at my clients until the last week.

There’s fucking shit loads of them. In IT there’s probably as many contractors, if not more, than permanent employees out there.

They will be covered won’t they? Surely? As long as they’ve done their tax returns.

Several were thinking of closing their Ltd Co.s due to the IR35 reform and I talked several out of it, thank fuck I did!

 

[Pezzer2]

Some firms show their true colours in a crisis. Our firm is being absolute a**eholes. I work for a small firm on the railway, we are classed as key workers. The excuse is we need to maintain the railway to keep things moving etc.. (yet some of the jobs we are doing can easily be postponed, non critical works ). Anyway suddenly they say they will only pay on production hours only. So we normally get our 40 hours regardless but now if they have only a shift for us for one week we get paid 10 hours only for that week. They refuse to put people on furloughed. Scandalous, they will probably claim for us and not pass on the money.

 

[Ban-jani]

IR35 is all about getting more tax revenue by removing the tax & NI benefits people who are "self-employed" (through their own company) get tax & NI wise when acting like employees. On one hand it does seem an unfair advantage but there's also a whole load of extra risk for contractors, who do provide a benefit to the economy by providing flexibility in the workforce.

The IR35 changes were all about getting more tax, you’re right. The government didn’t have the means to go after individual ltd co.s to check if they were actually outside and claim the tax back if they weren’t.

By shifting the responsibility to the end client, they knew companies wouldn’t take the risk and therefore would put a lot more inside IR35.

It’s less bodies to police and large companies would police themselves.

There are contractors earning £600+ a day, at the same client for years, who are paying 10% tax maximum, who really are getting away with murder but then there’s those that are paid much less, have periods outside of being contracted, where they’re not earning, who I feel for.