Self Employed Help, Coronavirus Bill

Committee of the whole House: 23 March 2020

14
Coronavirus Bill, continued

“Statutory self-employment pay

(1)

The Secretary of State must, by regulations, introduce a scheme of Statutory Self-

Employment Pay.

(2)

The scheme must make provision for payments to be made out of public funds to

individuals who are

(a)

self-employed, or

(b)

freelancers.

(3)

The payments to be made in subsection (2) are to be set so that the net monthly earnings of an individual specified in subsection (2) do not fall below—

(i)

80 per cent of their monthly net earnings, averaged over the last three years, or

(ii)

£2,917

whichever is lower.

(4)

No payment to be made under subsection (2) shall exceed £2,917 per month.

(5)

A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

Member’s explanatory statement

The purpose of this amendment is to make the Government ‘top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings averaged over three years, or £2,917 a month.


From here

https://publications.parliament.uk/p...9f02FeeDbny5ok



That'll do for me, add to it a mortgage holiday, most SE should survive :thumbup:

There are going to be some very upset people, the ones who declare 10 grand a year to stay under the Tax bracket.

Quote:

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Originally Posted by blue matt

Committee of the whole House: 23 March 2020

14
Coronavirus Bill, continued

“Statutory self-employment pay

(1)

The Secretary of State must, by regulations, introduce a scheme of Statutory Self-

Employment Pay.

(2)

The scheme must make provision for payments to be made out of public funds to

individuals who are

(a)

self-employed, or

(b)

freelancers.

(3)

The payments to be made in subsection (2) are to be set so that the net monthly earnings of an individual specified in subsection (2) do not fall below—

(i)

80 per cent of their monthly net earnings, averaged over the last three years, or

(ii)

£2,917

whichever is lower.

(4)

No payment to be made under subsection (2) shall exceed £2,917 per month.

(5)

A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

Member’s explanatory statement

The purpose of this amendment is to make the Government ‘top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings averaged over three years, or £2,917 a month.


From here

https://publications.parliament.uk/p...9f02FeeDbny5ok



That'll do for me, add to it a mortgage holiday, most SE should survive :thumbup:

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Yep, thats good - I presume that as both myself and wife are directors and receive salary that we'll both qualify for the average of 80% of last three years Self Assessment Returns

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Originally Posted by Tuerto

There are going to be some very upset people, the ones who declare 10 grand a year to stay under the Tax bracket.

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Net earnings will I would have thought include any income - as long as it can be classed as a result of virus

Quote:

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Originally Posted by Toadstool

Net earnings will I would have thought include any income - as long as it can be classed as a result of virus

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Self employed income is exactly that and does not include divs, interest, UK property, employment, cgt or any other type of income

Quote:

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Originally Posted by Toadstool

Yep, thats good - I presume that as both myself and wife are directors and receive salary that we'll both qualify for the average of 80% of last three years Self Assessment Returns

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This is for self employed people, not individuals who trade via limited company. They are covered by employee regulations

not a bad result for the SE'ed today

treated fairly and equally with the PAYE

well done the Government

Quote:

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Originally Posted by TISS

This is for self employed people, not individuals who trade via limited company. They are covered by employee regulations

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Not as directors they aren't...

I wonder if those tax returns would have looked different if folk knew this was coming .

Quote:

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Originally Posted by blue matt

not a bad result for the SE'ed today

treated fairly and equally with the PAYE

well done the Government

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This is going to hurt the country financially, as he said this and other packages are far outstripping others countries response.

Has to be done let's hope its appreciated it's a huge gamble.

Quote:

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Originally Posted by blue matt

not a bad result for the SE'ed today

treated fairly and equally with the PAYE

well done the Government

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It’s based on profits isn’t it, rather than income? Won’t that make quite a difference in practice?

yeah looks ok in principle better than what i expected

i wish when all this is over the government can make taxation so much easier for self employed people . i notice a few on here and other places think that a lot fiddle the books etc which isn't the case in most cases just use the current laws to gain maximum advantage

Its the system that's wrong not the self employed people that work within the system . IR35 needs to be looked at and refined for starters .How do you tax people fairly that work with money transactions etc ?

Just watch question time tonight. Literally 1000s left out.
Someone esle was applying for Universal. Credit took a screenshot saying they were 99000 in the Q.
THE system was under siege before all this now its on the verge of impossible

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Originally Posted by MOZZER2

yeah looks ok in principle better than what i expected

i wish when all this is over the government can make taxation so much easier for self employed people . i notice a few on here and other places think that a lot fiddle the books etc which isn't the case in most cases just use the current laws to gain maximum advantage

Its the system that's wrong not the self employed people that work within the system . IR35 needs to be looked at and refined for starters .How do you tax people fairly that work with money transactions etc ?

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IR35 itself is fine. The issue is with the determinations.

As present contractor makes the determination. Not difficult to do, use somebody like Qdos to review the contract. Too many then leave it there - ignore working practices. Easy to get a contract giving outside determination... Got a right of substitution? Cool, but if client don't honour that then working practices trump contract every day.

I've worked with many getting the contract correct and then quite frankly acting like client's bitch. Switch between IT projects at client request? No problem, Sir...

HMRC are blithering idiots, that needs saying, but IR35 isn't an issue when contractor and end client understand the issues and work correctly as a B2B relationship. There are far too many contractors extracting the urine.

well i could argue all night with your logic and can see your 180 degrees where i,m coming from but you are right HMRC are idiots !

the simple solution is stop medium and large companys stop using freelancers full stop not even giving them the option to see if they are in or out of IR35. job done

the major problem with that is this country is seriously under skilled in science and engineering for example . the current crop of undergraduates are not up to scratch in many areas are now re skilling going back to do apprenticeships basically on the job training .freelancers fill in the gaps shall we say papering over the cracks

JLR wouldn't be functioning in this country right now without freelancers trust me !!

I don't really know enough about this to comment but is there anything to stop them working at the same time at the same time as claiming? Obviously can't do that unless you are able to work from home but imagine that is a sizable minority.

Quote:

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Originally Posted by MOZZER2

yeah looks ok in principle better than what i expected

i wish when all this is over the government can make taxation so much easier for self employed people . i notice a few on here and other places think that a lot fiddle the books etc which isn't the case in most cases just use the current laws to gain maximum advantage

Its the system that's wrong not the self employed people that work within the system . IR35 needs to be looked at and refined for starters .How do you tax people fairly that work with money transactions etc ?

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Mate lets be honest, I worked self-employed in construction and everyone I know, plumbers, sparkys, carpenters all claim 10-15k a year and earn around 30k I can literally name 10 people even in my small network of friends.

Quote:

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Originally Posted by MOZZER2

well i could argue all night with your logic and can see your 180 degrees where i,m coming from but you are right HMRC are idiots !

the simple solution is stop medium and large companys stop using freelancers full stop not even giving them the option to see if they are in or out of IR35. job done

the major problem with that is this country is seriously under skilled in science and engineering for example . the current crop of undergraduates are not up to scratch in many areas are now re skilling going back to do apprenticeships basically on the job training .freelancers fill in the gaps shall we say papering over the cracks

JLR wouldn't be functioning in this country right now without freelancers trust me !!

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I'm well aware of that and don't disagree.

Where we probably disagree is that, certainly in IT, there are far, far too many who fail to grasp that running a Ltd means you are running a business. Working practices always trump contract because they are the actuality of the working relationship. Where a client demands contractor stop working on Project X and instead work on Project Y, something not covered in a statement of work, then there isn't always imo a B2B relationship there because client clearly expect a temp.

The company I run has had contracts terminated at times due to not performing client demands external to agree contract without proper assessment of the work required and subsequent contractual amendments as a result.

So basically both clients and a lot of contractors need to wise up in a lot of ways.

chris lee i haven't got a scooby doo how electricians and plumbers work etc in terms of taxation or sole traders for that matter

that's why i mentioned cash transactions . There are quite a few ways you can be self employed or claim to be self employed

The whole system needs cleaning up, especially in construction. I’m genuine self employed, work for myself mainly on domestic private work but the poor lads who are really by all intents and purposes employed, not self employed. They aren’t self employed by choice, they’re used like cattle by unscrupulous (on the whole) middle men who are used by the main contractor. No holiday pay, sick pay etc, it’s a disgrace, it’s bogus self employment, these middle men drop them like a shit house seat at a whim, no come back, no means of a challenge to the decision, here today, gone tomorrow. Many of these poor buggers live week to week and now have to wait until, at the earliest, June for some financial help. All this after the wettest autumn and winter on record when, for the outdoor workers who only get paid on production, were most probably earning less than Echo boys. I fear for their survival over the next few months.

Quote:

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Originally Posted by Eric Cartman

I don't really know enough about this to comment but is there anything to stop them working at the same time at the same time as claiming? Obviously can't do that unless you are able to work from home but imagine that is a sizable minority.

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It's a good point, and one I'm confused about.

You could have someone who's done well over the last 3 years and doesn't get a payment but re-invested a lot of their profit from last year into their business, but their work has dried up overnight.

And another who's done okay - gets £7.5K in June but is really busy between now and then anyway and gets a win - win.

Suppose all this is done very quickly and will never be perfect.

I run a consultancy business and the model is I pay both myself and my wife wages and dividends.

Yesterdays announcement means that I'll just get 80% of the £1k per month we pay ourselves should the contract be terminated due to CV19.

So all that profit that the government is saying is income from a disguised employment when they want to collect tax, isn't income from employment when paying it out?

Quote:

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Originally Posted by blue matt

not a bad result for the SE'ed today

treated fairly and equally with the PAYE

well done the Government

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Yep, just remember this act when your tax bill goes up. I'm sure you will.

Quote:

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Originally Posted by CCFCC3PO

Yep, just remember this act when your tax bill goes up. I'm sure you will.

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As a self employed person I’d have no qualms about my tax bill rising. I would then expect to able to claim sick pay and unemployment benefit should the situation arise. I was out of work a few years back, filled in the relevant claim forms, waited a while before receiving a letter stating that I was entitled to £0.00 benefit, very helpful. Tax paid up to date as well as N.I. contributions, yet no help at all. It’s been a hard old slog sometimes over the years being self employed, we work whilst ill, raise our tax but give us the benefits as well.

Quote:

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Originally Posted by Toadstool

I run a consultancy business and the model is I pay both myself and my wife wages and dividends.

Yesterdays announcement means that I'll just get 80% of the £1k per month we pay ourselves should the contract be terminated due to CV19.

So all that profit that the government is saying is income from a disguised employment when they want to collect tax, isn't income from employment when paying it out?

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I assume your wife works in a meaningful at the consultancy? If so, then the company is a legit business.

If it's a limited company then directors, which I assume both you and your wife are, will get zip.

However... this exculsion really craps all over HMRC's attempts to label Ltd company contractors as "disguised employees".

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Originally Posted by tell it like it is

Not as directors they aren't...

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Directors are deemed employees for income tax purposes. Whether a PAYE scheme is used or not is the sticking point

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Originally Posted by MOZZER2

yeah looks ok in principle better than what i expected

i wish when all this is over the government can make taxation so much easier for self employed people . i notice a few on here and other places think that a lot fiddle the books etc which isn't the case in most cases just use the current laws to gain maximum advantage

Its the system that's wrong not the self employed people that work within the system . IR35 needs to be looked at and refined for starters .How do you tax people fairly that work with money transactions etc ?

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The rules for IR35 shift the liability to the client and in most cases results in the wrong status being applied

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Originally Posted by tell it like it is

I assume your wife works in a meaningful at the consultancy? If so, then the company is a legit business.

If it's a limited company then directors, which I assume both you and your wife are, will get zip.

However... this exculsion really craps all over HMRC's attempts to label Ltd company contractors as "disguised employees".

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Yes she does - not just making tea and answering the phone!

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Originally Posted by TISS

The rules for IR35 shift the liability to the client and in most cases results in the wrong status being applied

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The change in rules, you mean.

Currently, contractor bears responsibility for IR35 determination, can still be inside... as you say, shifting responsibility to client to decide has led them to blanket ban PSCs ( which don't exist.. ).

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Originally Posted by CCFCC3PO

Yep, just remember this act when your tax bill goes up. I'm sure you will.

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Pretty sure my tax bill will be going up to pay for all the 80% help the PAYE are getting, so why not help the SE'ed with the same 80% ? ? ?

first payment in June.**** me

hearing alot of freelancers getting laid off today some of whom i know and worked with over the years over the country

had a letter placed on my desk thinking my number was up today but was a letter saying I was an essential worker and if I get stopped by the police / authorities I can carry on with my duties !! mind you I,m working from home 3 days a week now

if i do get laid off will volunteer to help with the health service in the interim

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Originally Posted by blue matt

Pretty sure my tax bill will be going up to pay for all the 80% help the PAYE are getting, so why not help the SE'ed with the same 80% ? ? ?

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They are helping the Self Employed.

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Originally Posted by CCFCC3PO

They are helping the Self Employed.

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Only if through PAYE...

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Originally Posted by tell it like it is

Only if through PAYE...

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If you're PAYE you aren't self employed!

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Originally Posted by CCFCC3PO

They are helping the Self Employed.

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Yea, i realised that when i posted this

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Originally Posted by blue matt

not a bad result for the SE'ed today

treated fairly and equally with the PAYE

well done the Government

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Quote:

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Originally Posted by blue matt

Yea, i realised that when i posted this

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Yes, and now you will be taxed fairly and equally with the PAYE. Let's hope some of those who are self-employed start declaring their real earnings from now on - hopefully they have realised that the taxes they are avoiding could have bought some valuable equipment for the NHS.

B,

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Originally Posted by CCFCC3PO

Yes, and now you will be taxed fairly and equally with the PAYE. Let's hope some of those who are self-employed start declaring their real earnings from now on - hopefully they have realised that the taxes they are avoiding could have bought some valuable equipment for the NHS.

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Ah, the self employed who rarely use the NHS because they have no safety net of sick pay or unemployment benefit while paying their taxes and NI contributions and very often have to drag themselves to work when feeling ill. Have you ever been self employed and fended for yourself without the umbrella of an employer? A lot of self employed people work in industries that only offer this method of employment, they aren’t doing it through choice, many work week to week and are stopped 20% of their gross, no chance of fiddling that. Outdoor workers have just been through the wettest Autumn/Winter on record decimating their earnings, now they have to wait until June for financial help. Yeah, let’s all knock the self employed, the ones you need if your boiler breaks down during Christmas week, your electricity goes pop on a Saturday afternoon, you need your car repaired at a reasonable cost, pissing down with rain and your roof springs a leak, a garden or front wall suddenly starts leaning precariously, the hairdresser who on the morning of a wedding will call to a house at 6am in the morning and do the hair of about twenty women in a few hours, the milkman out delivering in all weathers......Yep, all selfish pricks, let’s get rid of them all!!!!!!