/ self employed - a financial idea

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ClimberEd 12:52 Wed

Would you be interested in a 'bond' from the  government. 

Let's say you could take 

£1000/2000/3000 a month, over the next 3 months, at your discretion. 

You would pay it back only when earning (similar to a student loan), at base rate, over 30 years - essentially this would be an almost negligible amount per month.

Would that work for you?

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The New NickB 12:54 Wed
In reply to ClimberEd:

Doesn't apply to me, but I think it is a good idea.

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ClimberEd 12:59 Wed
In reply to The New NickB:

Thanks.  Let's hope they come up with something like that. Might plug some holes over historical earning levels etc

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jezb1 13:43 Wed
In reply to ClimberEd:

Why should a self employed person have to pay back any benefit when employed people don’t?

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The New NickB 13:48 Wed
In reply to jezb1:

One of the cases that is often made for self employed people being able to be more tax effieicient than employed people, is one of risk and reward. 

Post edited at 13:50
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wercat 13:53 Wed
In reply to ClimberEd:

it would be great as I'd have to live to be over 90 to repay it

Post edited at 13:53
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ClimberEd 14:16 Wed
In reply to jezb1:

> Why should a self employed person have to pay back any benefit when employed people don’t

Ideally they shouldn't.

But it would overcome the hurdle of not knowing what a self employed person earns and how much to pay them, which is (or has been as apparently something is on the cards now) the major stumbling block.

The monthly payback would be pittance (£30 month if it was £9,000 total, 1% interest over 30 years)  so in reality the objection would be one of fair treatment rather than financial practicality. 

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jezb1 14:24 Wed
In reply to ClimberEd:

I just don’t see too much of an issue on basing it on a self employed persons tax returns.

If they’ve been tax efficient, as in probably tax fraud, then that’s their fault surely? If that’s the case I guess that’s where UC comes in?

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ClimberEd 14:27 Wed
In reply to jezb1:

> I just don’t see too much of an issue on basing it on a self employed persons tax returns.

> If they’ve been tax efficient, as in probably tax fraud, then that’s their fault surely? If that’s the case I guess that’s where UC comes in?

As I understand it many self employed don't have 3 years of tax returns, or they vary wildly from year to year. In theory it sounds great, in practice it's not.

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neilh 14:31 Wed
In reply to jezb1:

The pre Coronavirus situation meant that there were tax/ni advantages to being self employed. I remember well the fuss when Hammond proposed levelling up NI etc. Self employed came out with good reasons to avoid this, now the boot so to speak is the other way round.

As an aside there are plenty of self employed people who did not have any choice. But there are also plenty who benefited from this.So its a difficult one.

Post edited at 14:32
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jezb1 14:32 Wed
In reply to ClimberEd:

Oh don’t get me wrong I’m sure the reality is far from simple!

Averaging 3 years should take care of the ups and downs I guess, but yep, newer self employed people definitely pose a problem...

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Derek Furze 15:09 Wed
In reply to ClimberEd:

I am self-employed and have been for around 35 years, even when also employed full-time at various periods through my career.

I'm not in a particularly difficult situation though my work and earnings are on hold from the end of the month.  At the moment, I am wrapping up a previous project from home, but it will close with this month's invoice.  The bond idea seems positive and if it was on the table I would give it serious consideration.  However, I would find it difficult to accept why I should be treated differently than someone earning a salary - I've contributed something similar to the economy / revenue for every year I have worked and for more than half of that time,directly created work and earnings for other people as well.  It is particularly hard to understand when this government is often claiming pride in the rising number of self-employed, when some of it is simply the 'gig' economy at work.  

It is easy to identify my earnings from my records.  Quite why they can't simply cover me and others with the 80% rule is hard for me to grasp.  I think anything other than that may well lead to action in the courts in future, as it certainly seems to be a deliberate unequal treatment for which I haven't seen a justification.

Lastly, as in many areas of life, some self-employed people work the system.  However, I was a bit shocked by plenty of examples of similar 'working the system' from people in employment, so if this is an argument people want to make, then we should acknowledge that it can be a feature of salaried and waged employees as well.  Personally, I find it really disappointing whenever I experience a lack of basic honesty in work, however it is manifest.  

The idea should be commended though.  I am glad someone is keeping our cause alive!

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In reply to ClimberEd:

I'm against any kind of debt based solution.  Government is trying to protect wealth while expecting people dependent on income to take the hit.  They are also being far too complex in their schemes and making busy work for civil servants.

They should offer everyone the exact same deal:

a. £500 a month per person.  No questions asked.

b. Interest on all loans set at 0% during lockdown i.e. no interest payments.

c. No tax during lockdown.

d. No rent during lockdown.

So everyone has enough to pay for food and utilities and a little bit left over but they don't have any big bills and they are stuck in their house so they have less expenses.   There is near zero administration and no stigma in taking the money.

Pay for it initially by printing money.

If there's a huge financial problem as a result of the money printing have a one time wealth tax and basically confiscate individual wealth over £10 million quid.    The wealth of the rich would have been wiped out by the 2008 financial crisis if normal rules of capitalism had been followed but they were handed a free pass by bailouts.  This time people dependent on assets should take the hit and people dependent on income from work should be saved.

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ClimberEd 15:25 Wed
In reply to tom_in_edinburgh:

> I'm against any kind of debt based solution.  Government is trying to protect wealth while expecting people dependent on income to take the hit.  They are also being far too complex in their schemes and making busy work for civil servants.

> They should offer everyone the exact same deal:

> a. £500 a month per person.  No questions asked.

> b. Interest on all loans set at 0% during lockdown i.e. no interest payments.

> c. No tax during lockdown.

> d. No rent during lockdown.

> So everyone has enough to pay for food and utilities and a little bit left over but they don't have any big bills and they are stuck in their house so they have less expenses.   There is near zero administration and no stigma in taking the money.

> Pay for it initially by printing money.

> If there's a huge financial problem as a result of the money printing have a one time wealth tax and basically confiscate individual wealth over £10 million quid. 

Ha. You're bonkers.

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ClimberEd 15:27 Wed
In reply to Derek Furze:

Agree with all of that.

The problem/challenge is that the government isn't making payments to individuals, they are paying companies who are paying the individuals, so the employer is the legitimising middle man. (don't shoot the messenger). Finding a comparator for self employed is difficult. In your case it would seem to be very straightforward, for others less so.

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In reply to ClimberEd:

> Ha. You're bonkers.

And why is it bonkers to give people who are dependent on income from work a free ride when it obviously isn't bonkers to give rich people who live off financial assets and property a free ride.

Nobody blinks when the Fed says it is going to spend a couple of trillion 'supporting' financial markets i.e. making sure the rich don't lose too much money.

Nobody blinks when government shuts down whole categories of business or creates situations where new orders are bound to completely dry up.  But it's 'bonkers' for landlords not to be able to collect rent or banks not to be able to collect interest.

We have got far too used to what is an incredibly illogical and unfair system.

Post edited at 16:15
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Derek Furze 16:42 Wed
In reply to ClimberEd:

Good point.  No shot intended.  Of course we could assume that the IR is the legitimising middle man.  After all, they approve accounts every year.

Agreed, it isn't straightforward, though universal income might be...

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Dax H 20:10 Wed
In reply to jezb1:

> Averaging 3 years should take care of the ups and downs I guess, but yep, newer self employed people definitely pose a problem...

Average over 3 years or last years returns depending on what is the greater up to a maximum of £2500 a month. 

For people without 3 years do it from 2 or 1 year, for the minority with less than 1 year they should be able to present proof of earnings from invoices, bank statements etc and seeing as business tax returns have been given a 3 month delay there should be a lot of tax assessors without much to do to sort it all out. 

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mutt 20:46 Wed
In reply to jezb1:

> Oh don’t get me wrong I’m sure the reality is far from simple!

> Averaging 3 years should take care of the ups and downs I guess, but yep, newer self employed people definitely pose a problem...


what I don't get is why the financial support offered isn't based simply on the furloughed person being a citizen of this country. Whilst the cap on payments at £2500/mnth goes someway to equalizing, surely, the poorer you are  the more vulnerable you are to financial shock and the longer it will take you to dig yourself out of the hole this crisis makes. Surely the vulnerable poor are more in need of a higher (or at least equal) government payout during this crisis. And furthermore if the payments are there to prevent economic meltdown surely it doesn't really matter who it is who are paying once the economy gets back into gear.

So my recommendation would be a basic national income for all. £1000/mnth for everyone. the well off will have more resilience if that's not enough to maintain their standard of living, and the poor will definitely not fall into a deep hole of debt.

And then of course there would be no problem accounting for the self employed.

Far be it for me to suggest that the governments response to-date has been designed to keep the poor poor, and the very poor (i.e. most self employed) destitute.

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DenzelLN 21:14 Wed
In reply to jezb1:

"Probably tax fraud"

What an idiotic thing to say.

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jezb1 21:36 Wed
In reply to DenzelLN:

Thanks Denzel. 

I don’t know the proper names for putting items through expenses, that aren’t actually allowable, so apologies if my terminology is incorrect.

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DenzelLN 22:24 Wed
In reply to jezb1:

Edit: Apologies i though that was a stab at all self employed people.

Tax efficiency doesn't equate to tax fraud. Avoidance is massively different to evasion.

There is a long long list of what can be put through as expenses, and yes the self employed are definitely better off tax wise because of this, except maybe for the CIS contractors in the construction industry who get taxed at source much the same as a PAYE worker, only they can claim their expenses back at year end.

Im pretty sure they could work out their earnings from the CIS system - not sure about other self employed people though.

Post edited at 22:27
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