Coronavirus

[AndyWolves]

Forgive my ignorance but I thought if you were self employed you were working through a limited company and would give yourself a small salary and get most of your money through dividends?

 

[The Bear]

The tubes and trains will still be rammed tomorrow morning. Guaranteed.

Because people will say I can't work from home so have to go in.

 

[leedswolf]

He needs to define "absolutely necessary"

Does he mean the journey is absolutely necessary because it is the only way you can work (which is for me as it is utterly impossible to work from home) or does he mean you should only work if your work is deemed "absolutely necessary" and you cannot work from home?

It's wishy-washy ambiguously written fucking bollocks. And he had that on a fucking autocue.

I interpret it as you cannot do your work at home and it's absolutely neccessary to travel to your workplace to carry out such work.

 

[Kenny]

Universal credit at £94 isn't it at the moment for the self employed?

Not a guaranteed payment. So many people have tried and been told they can get £0

 

[Newbridge Wolf]

Forgive my ignorance but I thought if you were self employed you were working through a limited company and would give yourself a small salary and get most of your money through dividends?

Depends, if you set up a business and pay yourself a wage, that's different from a sole trader who sells themselves (although I'm not sure my wife would take that description)

 

[Deutsch Wolf]

Forgive my ignorance but I thought if you were self employed you were working through a limited company and would give yourself a small salary and get most of your money through dividends?

Nope, I don't make anything like enough money to do that.

I'm a sole trader. I invoice people for work, they pay me and I work out my own tax/NI each January (well I put the figures in and HMRC tell me what I owe them).

 

[Kenny]

Forgive my ignorance but I thought if you were self employed you were working through a limited company and would give yourself a small salary and get most of your money through dividends?

Sole Traders work off money in - pay bills - whats left = salary. No dividends for them and even if you are LTD you can't give yourself moey that isn't there, so if your business has been told to shut you are then left with nothing or working through reserves built up to get you through the year or going through personal savings.

Now, it goes at the moment

Employed with 20k in your savings account - 80% of your wage covered
Self Employed with £0 in your savings - Nowt but an outside chance of getting £94 a week. Nothign guaranteed

 

[AndyWolves]

Depends, if you set up a business and pay yourself a wage, that's different from a sole trader who sells themselves (although I'm not sure my wife would take that description)

Thanks, it seems odd that people would trade as sole traders though. Aren't you vulnerable to losing everything if someone claimed against you and won?

Again, I'm ignorant here as have only been a permie

 

[Deutsch Wolf]

Universal Credit is a joke for self-employed people anyway. Have one month of earning £2k (let's say) and they'll give you nothing. They don't make up any shortfall during the next two months if you earn £0.

Dreadful, dreadful system. Designed by absolute cretins.

 

[The Bear]

Absolutely. I know plenty of "tradies" from my local pool and snooker leagues. Self employed blokes like builders, joiners, roofers, glazers and plumbers.

These people are essential to society IMO and need to be looked after.

 

[Deutsch Wolf]

Thanks, it seems odd that people would trade as sole traders though. Aren't you vulnerable to losing everything if someone claimed against you and won?

Again, I'm ignorant here as have only been a permie

Not sure what anyone would claim against me for.

I don't get paid in advance, I invoice on delivery. Don't do the work or do it poorly (not that either of these apply), don't get paid.

It's far worse the other way round, do work, don't get paid.

Being a limited company would not help me in any way, it'd cost me money for literally no reason.

It's a business in as much as it's my livelihood. It's not a business in the conventional sense.

 

[Kenny]

Thanks, it seems odd that people would trade as sole traders though. Aren't you vulnerable to losing everything if someone claimed against you and won?

Again, I'm ignorant here as have only been a permie

Ltd doesn't offer the guarantees it used to do. You used to be able to protect yourself from debt etc but since the Financial crash, every supplier needs a guarantor, so you are then fully liable. Also becoming Ltd adds in more Tax responsibility in Corp Tax. For a lone trader, being a sole trader is much more simple.

 

[Aikiwolf]

Kicked off my lockdown by discovering the toilet was leaking into the living room and needs a plumber to fix. Ffs.

We've stopped the leak at least.

 

[AndyWolves]

Sole Traders work off money in - pay bills - whats left = salary. No dividends for them and even if you are LTD you can't give yourself moey that isn't there, so if your business has been told to shut you are then left with nothing or working through reserves built up to get you through the year or going through personal savings.

Now, it goes at the moment

Employed with 20k in your savings account - 80% of your wage covered
Self Employed with £0 in your savings - Nowt but an outside chance of getting £94 a week. Nothign guaranteed

No, I get that. It was more around the paying tax thing.

Thinking about it though, if you did go through a limited company you'd be able to claim the 80% of your normal salary?

For sole traders, 80% of your average salary seems fair, based on last year's accounts (which I'm assuming are filed somewhere centrally)

 

[Sniffer]

No, I get that. It was more around the paying tax thing.

Thinking about it though, if you did go through a limited company you'd be able to claim the 80% of your normal salary?

For sole traders, 80% of your average salary seems fair, based on last year's accounts (which I'm assuming are filed somewhere centrally)

Yes but if you are paying a nominal salary and topping that up with dividends...................Who would have thought that a Pandemic was coming and that wasn't the way to go.

 

[AndyWolves]

Ltd doesn't offer the guarantees it used to do. You used to be able to protect yourself from debt etc but since the Financial crash, every supplier needs a guarantor, so you are then fully liable. Also becoming Ltd adds in more Tax responsibility in Corp Tax. For a lone trader, being a sole trader is much more simple.

You can buy insurance that gives you that I think?

Corp tax is less than income tax though

Sole trader is simpler but ltd is surely more tax efficient?

 

[Deutsch Wolf]

For sole traders, 80% of your average salary seems fair, based on last year's accounts (which I'm assuming are filed somewhere centrally)

Yep, you have to put it all through as self-assessment. If you've earned £0 or even made a loss you are obliged to file a tax return.

Part of the issue is that a lot of people have transient income - gardeners for instance will make very little between October and February. But they're now potentially being barred from working just as everything kicks off for them.

 

[Kenny]

No, I get that. It was more around the paying tax thing.

Thinking about it though, if you did go through a limited company you'd be able to claim the 80% of your normal salary?

For sole traders, 80% of your average salary seems fair, based on last year's accounts (which I'm assuming are filed somewhere centrally)

For a ST though, going Ltd and putting yourself on a payroll will add so much taxation to what will be a very small business. Wiping out a huge % of any profit margin. As no Government has ever had to do anything like this, it would not make sense to make that move in the hope that an emergency would see part of your wage protected.

 

[AndyWolves]

Yes but if you are paying a nominal salary and topping that up with dividends...................Who would have thought that a Pandemic was coming and that wasn't the way to go.

Most, if not all, contractors I know have built up 6-9 months of contingency for periods of no work and for not having job security

It sucks though that there are obviously people who don't have this luxury and they need to looked after

 

[Deutsch Wolf]

Sole trader is simpler but ltd is surely more tax efficient?

Doesn't come into it for me, I'm not a forum millionaire sadly. I earn just about enough to support me, on my own. Not in a position to go looking at arcane schemes to save a bit.