Government unveils help for self-employed - MSE News

Former_MSE_Naomi

Self-employed workers will be able to apply for taxable grants worth up to 80% of their average monthly profits to combat loss of income due to the coronavirus pandemic, it was announced today. The grants will be capped at £2,500/mth though and not everyone will be able to claim - we've full details below on who's eligible, when you'll get the money and what to try in the meantime if you're struggling...

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'Government unveils help for self-employed'

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[Deleted User]

So a furloughed employed person earning £51k will receive help to the tune of up to £2.5k/month. A self employed person earning £51k will be entitled to £0k.

ange1969

Absolutely disgusted by the self-employment support unveiled today. 18 years in self employment paying taxes year in year out. The support doesn’t cover myself and my husband who drew a mere £28k salary each from our business in 2018/19. We get £0 support even though we have had work contracts cancelled directly due to Coronavirus. 

We are invited to apply for Universal Credit whilst we pay our mortgage, support my mother (over 70 and with a serious underlying health condition / so have moved her from Scotland to live with us during this time), pay out son’s rent as he is at uni and face an uncertain future on timeframe and the ability to work again, when???????? 

We will NEVER vote for the conservatives moving forward. We have paid in all of our lives - how is it we do not get state protection along with every other working person in this country? Unfair doesn’t even begin to cover it. 

drjhb58

See TOTALLY UNFAIR SYSTEM FOR SELF EMPLOYED forum. Agree entirely- ‘ we are all in this together’ says the chancellor- absolute nonsense- email address to contact chancellor is there on my post- only by bombarding government with protests will any fair system be put in place

drjhb58

Employee earning £100000- rewarded with £2500 monthly- self employed worker earning £50000 on average over last 3 tax years- rewarded with ZERO

InA

I think this whole scheme (including the PAYE scheme) has been poorly designed and many people will fall through the cracks based on arbitrary cut offs.

PAYE scheme:

(1) I've read that, for employers, a renegotiation of an employee's contract may be necessary, whereby the employee accepts a reduction in pay during the furlough period, otherwise the contractual obligation would be for the employee to receive 100% of their income as per their contract. Small businesses might not have the formal processes in place to do this.

(2) Cash flow. Employers will have to pay wages to employees in advance of actually applying for or receiving the grant. This is a problem if the business has no money with which to pay their staff. The interest free loans on offer are not as straightforward as the Government pretends. Banks are still assessing risk, and undoubtedly they will be looking at the terms and conditions of lending supplied by the Government when they make this assessment.

Wetherspoons is one example of a business which recently came under fire for suggesting that its employees should get a job at a supermarket instead. It has since done a u-turn, but this has apparently come at the cost of now saying it won't pay its suppliers until this crisis is over (which now puts suppliers' staff at risk). The problem in this case (see link) appears to be cash flow. If some large businesses like Wetherspoons are having problems with cashflow then many small businesses will surely struggle.

(3) The requirement to not work. A furloughed employee (or their employer) may also be caught out if the furloughed employee takes on paid work during this period of leave. This additional source of income will of course be fed back to HMRC, who will then deduct an appropriate amount from the grant given to the employer. This is a problem if the employer has already paid the employee.

(4) Also on the requirement not to work. Directors of companies (PAYE income recipients) can't stop working for their companies, nor is their job at risk of not being "retained" so they won't be supported.

(5) Also on the requirement not to work. Potentially, there is a large group of shop workers and other customer facing employees, (amongst furloughed employees) who could potentially get jobs with "high demand" businesses (like supermarkets) needing extra temporary staff at the moment. But this scheme prevents this.

Self employed scheme: I echo many of the comments here.

Reading some of the threads on this board, it seems people are lapping this up and think the Government's assertions amount to a guarantee of their income, when it really depends on the inclination and solvency of their employer (which is probably not great if they're having to take these measures). IMO, the main beneficiaries of the PAYE scheme are likely to be big business (with existing access to cheap loans) who can offload some of their overheads and be saved from the mammoth task of re-hiring for businesses of that size. Smaller businesses will still go under. However, the stigma of giving handouts to big business is removed if the scheme is presented as available to all.

So it's not a case of self-employed versus PAYE, but the fact that people seem to have been duped into thinking that these schemes are primarily about protecting people's incomes. Many people will fall through the cracks, but we'll all be "in it together" when taxes are increased to pay for it all.

A temporary UBI payment would have been easier to implement, much fairer across the board and would also be a bonus for those having to work harder at the moment in the health service, supermakets and manufacturing essential goods etc.

calbo30

I started trading as self employed in 2016 and seem to tick all the boxes required for the grant. However as of 1st February 2020 I became a limited company and haven’t paid myself a wage as of yet. Does this make me ineligible for the grant or can I use my 3 years of books prior to becoming limited? 

Jeremy535897

Answered on your other thread

Jeremy535897

People haven't even started to absorb the complexities of this, like for example your self employment income is £50,001 in 2018/19 and then you suddenly discover you didn't claim capital allowances on a new machine by accident. So you amend your return and fall below the limit (it's more complex than this if you have more than one year of trading, but I am sure you get my drift).

s_bradley89

I am self employed and on the construction scheme. I subcontract for a company that has been shut down due to Coronavirus. I should be entitled to the 80% the government have announced but can’t wait till June. I don’t have tax a side as I pay mine weekly through the construction scheme. I’ve looked into universal credits but it says I need to apply with my partner. She’s still working but from home and on 80%. It says she either needs to apply for universal credits or change her situation of universal credits. She’s still working so shouldn’t need to do either of the options so do I apply as a single person? We have a 4 year old son, a mortgage and bills to pay. I’m so confused as to what route I need to go down. Any help will be massively appreciated.

goldilocks54

I meet all the criteria for this grant that has been mentioned. My query is would I qualify as I started to receive my state pension last summer?