Corona-19 and small businesses

BobQ

There is a lot of  debate about  small firms and the self employed.
I have a great deal of sympathy for those who have been "forced" into self employment (often on zero hours contracts) for the convenience of reducing their employers costs (no pension, no guaranteed work, no employment rights).
But should we feel sympathy for those who have made a conscious decision to be self employed for its tax benefits, or those who have a small business where they pay themselves a nominal salary and take their pay via dividends with all the associated tax benefits? Many choose this way of life, and now when they find themselves in difficulty they moan about it. Why did they not insure against being unable to earn a living?

annabanana82

I don't suppose many insurance companies cover pandemics anyway. 
So far it has become apparent how many people live hand to mouth, how many people have debt, without considering how they would service it should they lose their job. 
How many people have emergency savings but think they should be bailed out by the government  instead. 
But lots of people are suffering, and no one would have predicted us being in such a predicament, I think now is time to hold judgement and help people wherever and however we can. 
I consider myself to be very fortunate as I will continue to be paid in full as I work from home, I'd like to see help directed to those in need whatever their circumstances, I do however think that those with savings should take the same attitude.

ElephantBoy57

BobQ said:

But should we feel sympathy for those who have made a conscious decision to be self employed for its tax benefits, or those who have a small business where they pay themselves a nominal salary and take their pay via dividends with all the associated tax benefits? Many choose this way of life, and now when they find themselves in difficulty they moan about it. Why did they not insure against being unable to earn a living?

Of course I feel sorry for anyone not able to cope when they skip a months of earnings. I feel the same sympathy for people going onto universal credit and they are expected to wait a month for payment.

It was stated a fact-checking program that the Government will be borrowing a similar amount to the 2009/10 Government.

We should help to keep good businesses going and help all people when they fall on hard times.

If we are already at the stage where the Government are owing a massive amount, perhaps we are helping people too much, some should have been saved for the self-employed.

Thrugelmir

BobQ said:

There is a lot of  debate about  small firms and the self employed.
I have a great deal of sympathy for those who have been "forced" into self employment (often on zero hours contracts) for the convenience of reducing their employers costs (no pension, no guaranteed work, no employment rights).
But should we feel sympathy for those who have made a conscious decision to be self employed for its tax benefits, or those who have a small business where they pay themselves a nominal salary and take their pay via dividends with all the associated tax benefits? Many choose this way of life, and now when they find themselves in difficulty they moan about it. Why did they not insure against being unable to earn a living?

That's a key point. Likewise managing their personal finances sensible. Not having large mortgages, expensive lease cars etc. 
Generally we be seem to have become extremely complacent towards risk in society. 
Personally I believe the laws surrounding the definition of self employment needs to be tightened. Where people are "employed" by a single entity that provides their work. Then they should be treated as employees.
Casual work has always existed and does suit many peoples life styles. People undertaking such work need to take responsibility for their own actions.

Thrugelmir

Melonman27 said:

I would like to see helicopter currency drops here in the Uk just like USA dropping another $6 trillion 

the uk has some catching up to do

In terms of creating a social divide as wide as that, that exists in the USA. Absolutely no chance. 

steveheron44

We all have to treat this period as different and forget what we thought before, it is clear the self employed need help and it's clear it is very difficult to find a vehicle to deliver the help
I believe the easiest and quickest way to get money to the majority of genuine self employed, without too much abuse would be via the banks. Self employed people are likely to have a bank account, either business or current, the banks have cash at hand now, they will at some time have done a security check and they have the digital infrastructure and capacity to take the load.
My idea work work as follows:-
The employer furlough scheme is going to pay roughly £430 take home per week maximum, for the sake of this lets say we allow every individual £300 per week as a safety net. Any person wishing to claim can register with their own bank electronically as an applicant for the scheme, the banks carry out their own checks for any identity & fraud purposes and pay one week's money into the individual's account. The bank sends an agreement form to the address they have on record complete with a bar coded return envelope that Royal Mail deliver back to the bank at an agreed cost. Signing the application form would put the individual under legal obligation to comply with the rules, once the bank receives the form they continue to pay the weekly amount into the individual's account for as long as the Government see fit.
The self assessment tax form for filing Oct21/Jan22 can have a section to show what money has been received through the scheme which will give HMRC some time to devise how they judge the payments against the overall annual income, claiming any overpayments back through the tax system.
The Treasury can a agree a method to repay the banks capital and interest, again at a later day.
And long term to pay the country back for this help the self employed will have to dramatically increase NI payments to a point closer to the combined employee/employer deductions that are made against PAYE employees.
Thoughts?
Steve

Thrugelmir

Banks are in no position to perform checks. Are overloaded as it is. 

Splatfoot

My husband is one of the self employed. We live in the south east and have a fairly large mortgage in comparison to our earnings. However, 6 years ago, things were different. We both had government jobs, well paid etc and then came redundancy. My husband went self employed after that. There are no expensive lease cars here (A 20 year old Toyota that's just failed it's MOT) and a 16 year old van. So, you can perhaps hold your judgement, we haven't been abroad on holiday since 2006, camping is what we do. Second hand clothes and hosting language students to top up (which has obviously also stopped). So, yes we are in dire straits. 

Splatfoot

Also, agree with Melonman re helicopter drops. I have an economist friend who says this works better than quantitative easing. 

Thrugelmir

Splatfoot said:

My husband is one of the self employed. We live in the south east and have a fairly large mortgage in comparison to our earnings. However, 6 years ago, things were different. We both had government jobs, well paid etc and then came redundancy. My husband went self employed after that. There are no expensive lease cars here (A 20 year old Toyota that's just failed it's MOT) and a 16 year old van. So, you can perhaps hold your judgement, we haven't been abroad on holiday since 2006, camping is what we do. Second hand clothes and hosting language students to top up (which has obviously also stopped). So, yes we are in dire straits. 

No one is judging. Self employment covers a wide spectrum. Hence the difficulty in arriving at a fair and just system. 
While the Government may cover 80% of wages. Some businessess may simply chose to close their doors. If the crisis lasts for an extended period. Difficult times lie ahead for many.