Accounting and tax advisory firm Blick Rothenberg have said there are winners and losers in the government’s self-employment income support proposals.
“The government and HMRC have worked incredibly hard to get something out which will help the majority but there will be some losers,” said Heather Self, a partner at the firm. “Support of up to £2500 a month for an initial three months, with the possibility of an extension, is similar to the support for employees through the Job Retention Scheme – but with more flexibility as the self-employed don’t have to stop work completely.”
She added: “The cut off at £50k is understandable – some of the most highly-paid will not need this support – but some will be hit hard.”
- A family with one earner on £51000 will get nothing, whereas one with two earners on £49000 each will get two lots of full support
- Someone with a mix of self-employed and earned income may not qualify – for example, someone who is a part-time fireman on £10,000 but has self-employed income of £8,000.
- People with new businesses starting after 5 April 2019 will not qualify. This is needed, HMRC say, so that grants are based on existing tax returns rather than running a higher risk of fraud, but it’s very harsh for someone who left employment last summer to start a new business
- Junior barristers – who are typically self-employed but often earn very little in their first year or two – are an example of new businesses who will be affected, as well as the more obvious plumbers, hairdressers and so on.Tax advisors say some will be hit hard.
Heather said: “The income has got to be trading income – other income such as rent, or dividends will not qualify.
“Contractors who provide services through a company will NOT qualify for this scheme,” she adds. “They may be able to apply for the Job Retention Scheme, but there are a number of practical difficulties for them. This group is likely to be feeling left behind, despite the Chancellor’s words.”
She added: “It’s very hard to design a scheme like this at such speed. HMRC are also concerned about fraud – and sadly there are already stories of people trying to exploit the schemes available. This just makes it harder for those in real need to get the support they should have.
“Anyone who had self-employed income in the year to 5 April 2019 but hasn’t filed a tax return yet, must file it by 23 April to have any chance of qualifying for a grant,” she concludes. “Do it now.”
Original article ‘Winners and losers in government ‘s self-employed package’ written by Newsdesk Published by GR The Global Recruiter
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