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Signed...
@Steelbike- you say the Gov can't "have their cake and eat it" just you wait. When they push IR35 through and other "clamp downs" on the self employed sector, there will be a massive negative media spin put on us all to sway the general public against us.
Done
#PrayForBinners
#PrayForGreggs
Thanks very much for the advice guys. And thanks everyone for signing. I’ll get on it after the weekend. It does seem to be a grey area.
The Guardian were saying yesterday that the government are going to have to clarify all this as ‘slipping through the cracks’ is one thing, 2 million taxpayers left out in the cold is another thing entirely
Now signed, using a different email to the one that failed. Change.org have some kind of automatic sign up that's so transparent they don't mention it, so when it fails it's not obvious how to fix it.
Good luck in resolving it either way, binners. I am not sure that receiving a P60 makes the sender your employer. I get a P60 for pension payments.
the government are going to have to clarify all this
True of all the schemes they’ve announced so far. Companies are still not 100% clear how/when they will get the funds for the wages they are paying their furloughed staff, and freelancers on self assessment are in a similar position. Hope you get things sorted Binners, but we really are all in this the dark together.
They (government) really need to sort the loopholes out, I could furlough myself but as I’m Ltd that amounts to just over £500 a month, I might get a few bits of work coming so will hold off stopping the business entirely.
Like a lot of people in my situation I have a basic salary and then top up with dividends. HMRC have access to all the info on What your income is so can work out if you could/should be supported.
And being Ltd isn’t some huge tax avoidance scam, I’m only ltd because a lot of the agencies I work for would not let you invoice as a sole trader even though you might only do a few 1-2 day shoots a year and not on some 6month IT type contract.
You still pay corporation tax and are then taxed again at a lower rate when the company pays you.
I just don’t see the logic of giving help to some and not to others even when they both pay similar amounts of tax on similar incomes.
HMRC have access to all the info on What your income is so can work out if you could/should be supported.
Well they sort of can and can't. In trying to run a comparable scheme to the furlough and SE their concern is that they can't distinguish between payments to a director from their own company and dividends from other investment. WE know the difference - its in all the evidence we keep as business owners but the submission to the HMRC doesn't make any distinction.
The schemes that already exist revolve around already submitted information - past SE returns and current PAYE records. That stops business making up employees / their wages or someone claiming for a business income they don't really have.
But for one-person companies that information doesn't exist in a way already submitted - so that creates several obstacles. Its difficult to come up with a programme that can't easily be gamed, theres no relable existing metric (so even if a system could be devised it would still be unfair and arbitrary and people would still fall through loopholes) and because theres not really any existing returns that make the personal profits / investments distinction theres no real way of knowing what a scheme would actually cost - even though they'll know what the total tax take from Dividends is - they don't know what portion of that is directions of small businesses.
For the freelance PAYE folk I wonder whether the way through might be to take NI payments as a metric - if people have had a mix of employers and a mix of PAYE and SE then the most reliable measure, over say 3 years, would be their combined NI contributions. But again theres nothing really similar to that for one person businesses.
Signed! Good luck fella.
Thought I'd cheer you up Binners.
On the 20th March, Easy Jet paid out £174 million in dividends to it's shareholders, including £60 million to it's co founder Stelios.
This week the government gave Easy jet £600 million from the Covid 19 emergency fund.
So stop moaning mate and remember we're all in this together yeah?
Signed
Easy Jet have only been loaned that money by the government. Better that than the company become insolvent and thousands of jobs being lost. Stelios also said he was willing to support the company but only if the massive Airbus order they've just placed is cancelled/postponed etc. as there is no way they can now afford it.
mjb,
So Stelios is basically blackmailing the government.
Easy Jet hadn't prepared for a rainy day. They spunked all their profits on dividend payouts. If you're an airline a pandemic should be top of the list in terms of risks to your business. You should either keep some cash in reserve or take out insurance.
Wimbledon has been taking out pandemic insurance to the tune of £2 million every year for 17 years [£34 million total]. They are now looking to receive something like £150 million in an insurance payout.
Let the airlines fail. New airline companies will emerge. The old Easy jet planes aren't going to vanish into thin air [unless they're Boeings], new airlines will buy them and staff will be recruited by the new, perhaps more prudent owners. [Whoever runs Wimbledon would do a better job of running an airline than Stelios. might even be a better airline to work for.]
Would you lend £600 million to a company in a deep hole that'd just given out £174 million in bonuses during the middle of a pandemic? Would you trust them to pay it back? If so, would you be my bank manager please/ Pretty pretty please....
Sorry for the thread hijack, this belongs on the 'We're all in this together yeah?' thread. But if it bumps it up to the top of the page and gets more signatures to the freelancers cause then it's all good.
It's Corporate Socialism I tell ye.
Does sound like Lucy should be looking into things a bit further for you, I'd be pushing that avenue an awful lot further, and possibly going above her head if a satisfactory answer doesn't present itself.
Good luck and fingers crossed, sounds like a possible bit of hope.
Signed
The completely and utterly forgotten and shafted newly self employed .... 😆 (struggling to understand how 16 months is new mind you...)
Not to worry, got my first email in 2 weeks today, I'll get 25 quid from that, should see me through this. 😆
Update:
Martin Lewis has got the chancellor to clear up some of these vague grey areas. Looks like your agency can now furlough PAYE freelance staff. Phew!
There's the answer question 7, calling me an untrustworthy fraudster!!! (2nd video)
Cheers Rishi, nice to feel loved! 😆
That's hopefully good news Binners, I've signed the petition anyway. Now Rishi needs to sort something for us small (micro) business (2 man here) who mainly pay themselves in dividends. They have my previous year's tax returns so why can't they use the figures on my P60. Most small business owners like myself are not rich. I earn nearly half of what I did in my previous job and the same as I did £15 years ago.
You can't have it both ways.
Paying yourself a small wage and taking the rest in dividends is usually done to avoid tax. These people can't then expect to get bailed out as if they had paid themselves a decent wage because they choose not to.
You can’t have it both ways.
Paying yourself a small wage and taking the rest in dividends is usually done to avoid tax. These people can’t then expect to get bailed out as if they had paid themselves a decent wage because they choose not to.
Not quite. People who are running small companies are not paying 'no tax' or operating as a company to avoid tax they're operating as a company because they are running a business. Don't conflate that with the motive for Disguised Employment of high earners using LTD co's in order to wriggle round higher tax rates (with savings for both for the employer and the employee)
People who run real businesses are managing their cash flow and are constantly having to judge when they take money out of the business to live off so take a low monthly wage (or a low annual wage payment) and draw the profits they can afford to when its prudent to do so. Those dividends have already been taxed before they're drawn and they're taxed a second time when you draw them.
At a high income there may be a meaningful tax benefit compared to a normal salaried job (although theres a fairly chunky dividend tax for high incomes now - but at more typical business incomes the difference isn't that stark.
But where people are running a bonafide business the their accounting costs are pretty high - more than the tax saving for anyone under the higher tax threshold - all other things being equal you might as well be a sole trader once those costs are paid. But for reasons other that tax theres often a need to trade as a Ltd Co
But thanks for the piss in the chips anyway.
Matt24k don't conflate disguised employment with genuine small / micro business. Mind you the government appears not to know the difference so you can't expect Joe public to.
People who run real businesses are managing their cash flow and are constantly having to judge when they take money out of the business to live off so take a low monthly wage (or a low annual wage payment) and draw the profits they can afford to when its prudent to do so.
Matt24k isn’t entirely wrong though is he. As a director of a small Ltd company myself ( most of my clients won’t work with sole traders), my accountant advises me to take a salary which is above the NIC threshold, but low enough to not have to actually pay any NIC’s. (So technically you are avoiding that “tax” if you do the same as me. Also avoids the company having to pay employers NIC’s too.
This is offset of course to some extent by the corporation tax you have to pay if you have made a profit ( and accounting fees 🙄) And of course dividends are taxed at a lower rate.
It’s not tax avoidance , just being tax efficient. Overall, I save some money doing it this way, but thankfully, still have to pay a shit ton of tax (corporation and income) each year.