Self-employed - what exactly are we getting?

I know there are some other self-employed people on here so thought I’d ask this question (I’m looking at other sources too but not found anything concrete yet).

The Chancellor announced 80% of profits…

Is that Taxable Profit (i.e. the part of your profits above the £11k threshold), or the entire Profit? I’ve read both from reputable news sources so … yeah which is it? Will make a massive difference for many people!

Thoughts?

I believe it is the entire profits

But this is subject to tax so will be included in the 2020 11,000

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Yeah that’s what I believe too, but a lot of people looking at their tax bills are getting confused I think.

Difference between “profit” and “taxable profit”, why didn’t he just say income or earnings?! :slight_smile:

I know with employed people they released a document a couple of days later. Hopefully, they will do the same for self employeed

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He said the ‘very recently’ self-employed would be left out but in reality anyone who only set up their businesses in the last 3 years is likely not getting anything. I set my business up over a year ago but only did my first work last April, so I submitted a tax return of £0 in January. My one for next year is ready and can be submitted early which shows something a bit more healthy, but that doesn’t count for anything.

Natwest texted me about loans but I clicked the link, logged in, and turns out I have a basic business account (as I didn’t want any credit, just somewhere to deposit income before Monzo launched their business accounts) I’m not eligible for anything through them.

I can only hope some new remote work comes up within the next few months.

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Self employed people are getting ****ed over, that’s what they’re getting. :rage:

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It’s the 50k cap I find confusing to be honest :thinking::man_shrugging:

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Can you elaborate? I think the package for employed and self-employed is pretty generous?

It’s eligibility that is much less generous.

The whole thing relies on your 2018-2019 tax return, which has absolutely no bearing on lots of people’s current circumstances - it’s just so long ago.

Which leaves a whole load of economically active people at the mercy of the UK’s famously generous and well-functioning benefits system.

The irony being that the same people who can’t get support under the package may then not qualify for benefits either, particularly if you have a partner earning decent money :man_shrugging:

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Here is the exact wording. It is “trading profits”

Full guidance is here

PwC kindly defines “trading profits” on their website…

taxable profits include money that a company makes from doing business (known as ‘trading profits’), rental income from property, investment gains and other chargeable gains

I think the point is that the scheme does not cover rental income or money made on investments etc. It’s clearly a way to limit the scheme a bit.

For most self-employed people, I suspect that there’s no difference between your taxable profit and your trading profit.

But, for the sake of argument, if you have, say, a property that you let, the income from that would be excluded from the scheme, it seems.

That makes sense. It seems bizarre to not take 2019-2020 into account, given that it’s almost over.

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I guess the issue is that it isn’t over. So they don’t have the data on everyone yet

And it might take a few weeks for all to be sorted in which case it would delay money reaching people by more than June (which I think is later than it should be)

The current year will be “done” for tax purposes in January 2021!

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Well, that’s true. I have very simple taxes so I usually submit my assessment in April, but I forget that’s not the case for everyone :see_no_evil:

I’m an IT contractor so I suppose I’m self employed. I won’t be getting anything though as I’m paid mainly through dividends. That’s fine, taking on financial risk is part of the game running as a business. What I’m looking forward to is the government trying to say I’m an employee next year with IR35 reforms after this. Surely that’s too much hypocrisy even for this lot.

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I kind of get the reasoning. My boss was a contractor and it made no sense. He was functioning as an employee but wasn’t one. It didn’t work well for us, worked great for him though.

He clearly wasn’t working as what would normally be considered self employed, nor was he working under what would normally be considered contracting work (contracted to complete a specific job or work) :man_shrugging: I can see why some changes were needed. But I can’t say if these are appropriate enough to stop that kind of issue

There are certainly those that take the piss. Some of the high profiles cases being BBC presenters working on contract for 7 years+. I would say the experience of most contractors though is 3,6,12 months at one place delivering a specific project then moving on and having the risk of being hung out to dry during economic downturns, virus pandemics etc.

I imagine because there’s only one sensible way to interpret it: it’s 80% of profits (i.e. precisely what he said).

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Hey, thanks for the response. Could you maybe be mindful of your word choice in future. “there’s only one sensible way” could be interpreted to be suggesting that I am not ‘sensible’.

The language reflects the problem with our politicians, more than anything.

They live in the fantasy world of incredible wealth and financial jargon, so it’s almost impossible for them to conceive of the lives that countless “little” self-employed people are living. So they bung “trading profits” in their main communication to the self-employed, even though that is a totally meaningless and confusing term for the vast majority of them!

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