Universal Credits - Self Employed

MissMoneypenny

Blue22 wrote: »

We have lived like misers for six years. We have saved everything we could. My OH has done hundreds of hours of overtime. I have taken every freelance work I could on top of my own job. All in all, I have mostly sat in front of a damn monitor 12 hours plus a day for seven days a week, only taking time off when I felt my head might explode. I am now in my late 30s, I want to have a child,

What's happened to those "lots" of children you have, that you posted about before? And how can you be in your late 30s, if your lots of children are aged bewtween 19 and 31?

Blue22 wrote: »

the cut in CB will not affect me directly as mine are all now non dependents (19 to 31) Although even if they had been younger, I would have been unable to work around my Husband as his job was dependent on being available 24/7, as are so many jobs, e.g. police, military, AA men,lorry drivers etc etc.

You also post a lot about how tax credits work and I assume that isn't because you work for HMRC as you have moaned about HMRC staff not knowing about tax credits? And as you have said above, you were "unable to work".

plum2002

MissMoneypenny wrote: »

What's happened to those "lots" of children you have that you have posted about before? Such as this post:-




You also post a lot about how tax credits work and I assume that isn't because you work for HMRC as you have moaned about HMRC staff not knowing about tax credits.

She/he was quoting someone else when she/he mentioned the wanting a child

MissMoneypenny

Thanks for that Plum. Perhaps if that person Blue quoted didn't have to pay out lots of taxes to give welfare to people who; have lots of children because they know the state will pay for them if they don't want to work to keep their own children, they could afford a baby?

Tax Credits were a big mistake: the less work people do, the more welfare they claimed..

• Want to keep having children but don't want to pay for them; the welfare state will just pay for every child you want to keep having.
• Want to be a stay at home parent/s even though you can't afford it and the children are at school all day and old enough to be left for a few hours; the welfare state will give you those lost wages.
• Just want to work a few hours a week but you can't afford to keep yourself; the state will make up your wages.
• Don't want to jump through JSA hoops; claim to be SE or sick instead and the state make up your wages (looks better for fixing those government unemployment figures too).

No wonder Blair called tax credits "a vote winner". Now we just have the problem of paying back all the money he borrowed to finance these mad schemes. The country haven't even got any gold reserves left now as Brown sold those too, to dig himself out of a hole; while also spending all the north sea oil revenues when they were at their highest. The Norwegian government saved their oil revunue.

BigAunty

HappyMJ wrote: »

True but you don't get expenses in an employed job on minimum wages.

True, but despite the travel/PC expenses that can be legitimately claimed for business use only by a self employed person, £2.50 per hour after expenses is totally dismal, even if a token amount is allowed for any home use if they operate their business from home.

A person on NMW clears around £200 per week. The other poster who is self employed clears about £75. I'm most people on NMW can cover their basic household bills, get a cheap laptop, pay their bus fare to work and still be better off.

What you are describing is another reason, apart from seemingly continous top-ups of income related benefits, why people who run their businesses dismally don't wind them up, namely that their personal costs are part subsidised by the business expenses they can claim. So they are diddling (quite legitimately) the taxpayer twice as they pay naff all to the public purse and they continually draw from it.

MissMoneypenny

BigAunty wrote: »

So they are diddling (quite legitimately) the taxpayer twice as they pay naff all to the public purse and they continually draw from it.

I think that many SE knew they could do this and were quite happy to claim it as long as it continued, but they are clever enough to accept this practice is coming to an end. i.e.It was good while it lasted.

Other SE are struggling to understand why the practice is coming to the end as they seem to think paying reduced taxes and claiming maximum welfare, are the same thing.

Sixer

BigAunty wrote: »

So they are diddling (quite legitimately) the taxpayer twice as they pay naff all to the public purse and they continually draw from it.

I don't know if that's entirely fair. I'm self-employed and I work mostly from home. I've agreed with HMRC figures for all shared expenses and they really aren't that much.

I can claim 10% of electricity (no gas in the back of beyond), water and council tax bills. That's about £310 per year. So I save £62 per year in tax. I would have paid those anyway, so a saving for me of £62.

I can claim 33% of my internet connection and telephone bill. And that's because 33% of the phone calls and internet time is GENUINELY business use. That's £150 per year or £30 in tax saved. I would have paid the internet and line rental anyway, but not made the business calls, so let's call it £15 saving for me.

I can claim 33% of printer ink and paper bills. Again, this is GENUINELY the proportion used for business (two kids with homework and me and a bit of household faffing). Last year, that came to about £50, so £10 in tax saved. But that £50 was genuinely spent on supplies, so no benefit to me.

I can claim 45p per mile business travel expenses for my car. Last year that came to £350 or a tax saving of £70. But the fuel is a genuine expense so no saving to me. The extra mileage adds to running costs and depreciation, so no real saving for me, but let's bias things your way and call it £20 I'd have spent anyway.

So there we have it. Tax I've saved on expenses I would have had anyway comes to less than £100 on a profit of £30k or thereabouts. It's hardly a huge incentive to be self-employed rather than employed, is it? What about all the benefits I don't qualify for, despite paying two classes of NI? What about the workplace pension I don't get? Or the sickpay I don't get? Or the risk I take for bad debt and the like?

If you're not cheating (which is breaking the law, not an advantage of being self-employed), I'd say PAYE people enjoy a much easier life.

Edited to add: I forgot capital purchases. About once every three years I buy a laptop, which is used for private and business use. Last one I paid £800 for. 66% business use. So that's £530 every three years, giving me an extra £100ish saved in tax once every three years. Gotsta have full disclosure!

BigAunty

Sixer wrote: »

I don't know if that's entirely fair. I'm self-employed and I work mostly from home. I've agreed with HMRC figures for all shared expenses and they really aren't that much.

I know that the subsidy for those who live/work from home is very low in terms of expensing household bills (business portion) for tax purposes as I'm self employed - it's a token sum. I was actually taking a previous poster for task who seemed to think that PC, travel expenses and the like for the self employed and seemingly makes it not worthwhile to have regular employment, that if you earn tiny income from a business, it's somehow massively beneficial on domestic bills.

But it is still worth considering the lack of paying tax and the extra benefits that can come from people running largely unprofitable micro businesses because those on low PAYE incomes will probably pay more tax and get less benefits as their overall income is higher.

princessdon

It depends on the job, my OH was SE (but via a brolly as neither of us really understand Tax etc), he took a pay cut and became PAYE. He works from home (when not away) and his contract states home. He is allowed £4 per week tax break to cover everything.

Sixer

BigAunty wrote: »

I know that the subsidy for those who live/work from home is very low in terms of expensing household bills (business portion) for tax purposes as I'm self employed - it's a token sum. I was actually taking a previous poster for task who seemed to think that PC, travel expenses and the like for the self employed and seemingly makes it not worthwhile to have regular employment, that if you earn tiny income from a business, it's somehow massively beneficial on domestic bills.

But it is still worth considering the lack of paying tax and the extra benefits that can come from people running largely unprofitable micro businesses because those on low PAYE incomes will probably pay more tax and get less benefits as their overall income is higher.

I think some posters on here seem to conflate what is a business expense (running costs outside fuel for cars, for example) and what they'd have been paying anyway, if they weren't working - and conflate them incorrectly. But I take your point.

HappyMJ

princessdon wrote: »

It depends on the job, my OH was SE (but via a brolly as neither of us really understand Tax etc), he took a pay cut and became PAYE. He works from home (when not away) and his contract states home. He is allowed £4 per week tax break to cover everything.

Technically that's not SE...that's working as an employee of the umbrella company. He would have been paying Class 1 NI on his income as an employee. Employees are only allowed a £4 weekly expense for working at home without having to provide proof by way of receipts. http://www.hmrc.gov.uk/incometax/relief-household.htm

If you understood a bit more about tax you could have worked through a limited company rather than an umbrella company and the company you own could have rented a room in your house for company business. It would become an expense to the company reducing profit and tax payable and would then be income for yourself split between the tenants or owners of the property and the tax due on that income could be offset by either including a portion of the rent you pay out or the interest you pay on your mortgage as an expense on your personal tax return.