Self employed
The Governments rescue package
Self employed
Self employed
Hello again readers,
As I see it, the governments rescue package for self employed people of this country sounds fantastic in theory but, i’m not so sure that it’s that realistic for many.
Most self employed people work extremely hard, working seven days a week trying to support their families as opposed to an employed person working there 9 to 5 contracted hours.
S/employed people do not receive sick pay and will continue to work though ill health where possible to continue to make ends meet. They do not receive holiday pay, of which is highly welcomed due to the continued hours they keep. A lot of s/employed people are under extreme pressure to succeed and meet their monthly commitments and, trying to provide for their families needs.
Working as a self employed person obviously has some benefits as people wouldn’t have choose this working environment if it didn’t. They can start work when they want to, finish work when they want to and able to juggle their day around family commitments when needed.
There are many self employed people who didn’t choose this work life because they thought it was a quick rich scheme. Many didn’t have a choice, a fair amount were made redundant and not able to find employed work but, with mouths and bills to pay opted to work as self employed. There are others who applied for employed work only to be offered the bare minimum or a zero hour contract who took the plunge feeling they had nothing to loose.
Being self employed is not all it’s cracked up to be, every day is hard and long and there are no guarantees of a steady income, the saying is, “if I don’t work, I don’t eat”. It’s certainly not all bees and honey!
The Government’s Rescue Package
The rescue package for the s/employed offers 80% of their profitable tax submissions, I will say that again 80% of there submitted profits on predominately years 18/19 returns. Sounds great doesn’t it? Wrong!, Let me explain.
Most s/employed people can not afford to submit high profitable earnings, yes, most would love to as it would stand them in good stead with applying for a mortgage etc but, it’s not that practical. If a s/employed person was to show every penny they made 9 times out of 10 they would find it impossible to live and pay their tax and NI contributions. It’s that simple.
The government are aware of this dilemma, hence keeping the rescue package below declared earnings of 50,000 per annum, knowing fully well that the payments due will be within the governments grasp and sound fantastic. To make this even worse, the little bit you might be able to claim isn’t available until June when HMRC will contact you.
The government has offered to defer tax payments until January 2021, any easy offer as the new scheme of paying forward came into effect this January but, you must apply for this, it’s not automatic.
If I’ve neglected to mention something, it’s because i’m not aware of it so, please let us all know if I’ve missed something beneficial to the self employed.
The cold hard facts for the self employed
The cold hard facts, what are the option for a self employed person as I understand it.
They are told to apply for Universal Credit returning a single person £73.34 per week. The government has now increased that amount to the be in line with the statutory sick pay of £95.85 per week but, you have to wait 5 weeks before you see a penny.
This is their calculations for a single person to be able to pay for food and all utility bills! Everybody today has mobile phone bills, internet, subscription for TV i.e Sky, credit cards and car finance, but these are considered luxury items and will not be included in your need to live hence your £95.85 per week.
You will not be entitled to any benefits if you have savings of £16,000 or above.
In the mean time, all and any earning you might have earned trying to feed yourself and trying to keep your little business a float through no fault of your own must be declared and will be deducted from your universal benefit payment before you receive it.
If like most you have a mortgage to pay or rent, then you will receive a proportion of benefits to help you cover these costs.
For example, a single person living in a 2 bedroom rented accommodation
They will take into account how many bedroom you have and how many people live in your household and deduct a proportion of the benefit for every extra bedroom you have thats not occupied.
The calculation for a single person living in a two bedroom rented house in Suffolk
March entitlement £93.36 one bedroom rate per week
April entitlement £112.77 one bedroom rate per week
My calculations working per month from April 2020 is as follows-
£112.77 x 52 weeks ÷ 12 months = £488.67 to cover your rent.
I do not know anyone living in Suffolk who has a rent of £488.67 per month do you? Looking on rightmove for a 2 bedroom rented property. Prices range from £600 to over £1000 per month. Working on a rent of £750. per month, as I think that a fair price to work on, my calculations are as follows-
£750. Rent – £488.67 rental allowance = a deficit of £261.33 per month
Universal credit income of £95.85 per week x 52 weeks ÷ by 12 months = £415.35 per month
£488.67 housing payment + £415.35 universal income = £904.02 – Rental payment £750. = £154.02 left to pay your bills and eat.
God help the self employed, I think you will see a huge increase in people eating from food banks as they surly can not afford to pay their bills and eat. This is not a joke people this is real and extremely worrying to so many.
Sorry for the doom and gloom readers, I just felt it necessary to enlighten you all for the next stage in this horrific situation we now find ourselves in and through no fault of our own.
Please stay safe and take care of you and yours,
Sue x
Please email me at [email protected] with all your comments, questions, stories and especially if I have neglected to mention something significant to help the self employed.
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