Self-employed and furlough

gbu_2

Im self-emloyed and understand that come mid may HMRC should contact me in regards to possible furlough payment.

As i read it its based on previous 3 year average tax records from profits.

Is the 80% based purely on profits over those years in question?

At the end of my financial year after wages and outgoings have been paid i rarely have any profits, its a paying job which earns me a living and profits after wage is usually at a minimum.

So with this in mind am i likely to get 80% of relatively little amount which wouldn't even cover my wages?

BrassicWoman

It sounds like you make a profit and pay yourself from the profits, so that should be ok - see here for more information and a link to "how they work out your trading profit." It's not what you have left after you pay yourself, it's your whole profit.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

calcotti

You are referring to the Self Employed Income Support Scheme (SEISS). This is different to furloughing which applied to employed people and the Coronavirus Job Retention Scheme (CJRS).

You refer to a wage. Are you referring to money you take out from the business from the profits or are you actually operating as a limited company and paying yourself through PAYE?

unholyangel

If you're self employed and have been filing a personal tax return then you should know exactly what self employed profits are because your calculation explicitly tells you what they are. 

 

gbu_2

No im not a limited company paying myself PAYE

I just pay myself from profits but only take out as and when i need it rather then an actual 'regular' wage

Jeremy535897

gbu_2 said:

No im not a limited company paying myself PAYE

I just pay myself from profits but only take out as and when i need it rather then an actual 'regular' wage

It's a common misconception that self employed profits are calculated after the sole trader has taken a "wage". If you are self employed, anything you take out of the business for yourself is known as "drawings", not "wages". The business makes a profit and you draw out that profit as and when you need it. Your last post says exactly that. Your tax returns will show the taxable trading profit, before any drawings. It is taxable trading profit that will determine the amount of grant you receive (80% of average monthly figure over 2016/17 to 2018/19).