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PRO

It was interesting to see the couple of 'stings' in the Chancellors new scheme - a couple with immediate impact, the other pending 

- For any one who is 'creative' or takes cash-in-hand and under declares on the SA001 form is effectively stuffed as it's based on profit, not turnover 

- Anyone starting in business since April 19 is excluded ( if I understood correctly ) as they've yet to file a SA001. Potentially unfair, but if allowed potentially open to massive abuse

- The implicit threat of normalising NIC payments next year to match those in employment 

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  • PRO

    What's an SA001?
    I do the online self assessment is that what you mean?

    if people have been creative that's their problem and it's come back to bite them hasn't it!

    • PRO

      Yes, it's effectively the form you fill in.

      Exactly 🙂

  • PRO

    I think these are fair. The max £2500 equates to an average of £30k profit each year for 3 years. I was wondering whether to rush out the tax return for year end March 2020, but no point.

    On one of the daily downing street briefings, point 2 was asked indirectly, and they said they would take whatever people had upto 3 years. So I guess if people get in something like a return, then they may get something. Not sure, but that was what was implied.

    What are the NIC rules you refer to. Wasn't aware it was vastly different and I still seem to pay a lot of NIC.

    • PRO

      This was what I was referring to - if I've understood correctly 

      https://www.telegraph.co.uk/tax/news/chancellor-sunak-eyes-national...

      Chancellor Sunak eyes National Insurance hike in return for self-employed bailout
      The Chancellor has laid the groundwork for a tax increase for freelancers, while announcing a package of measures to help self-employed people throug…
      • PRO

        I think this could also be linked to the postponement of the IR35 regulations and Ltd Company rules reagrding taxation.. He has stated that everyone should pay the correct taxation as well......... 

  • PRO

    When the chancellor announced the scheme and set the limit to those earning less than £50k, he stated that the average income of all those above £50k was £200k. Guess that's skewed by all the footballers and celebs being "self employed".

  • PRO

    As for the NIC it was always my understanding we paid a bit less because we don't get sick pay and holidays etc?

  • PRO

    OK thanks, that makes sense. 3% increase seems fine with me for parity. Most self employed people have other benefits like ofseting some household costs eg their home office proportion of bills, mortgage interest etc. Not much and it has a limit. Other things like mileage allowances, insurance deals (like I have my domestic cars insured with mfu like the vans and I get a discount due to that).

    Overall, I think it's a well balanced scheme helping those that need it the most.

  • those who put in a fiddled tax return of a profit just below income tax thresh hold will still get a couple of grand for free so will be unlikely to complain. as they might have been in receipt of working/ child tax credits also, which are still a thing. ultimately what they have saved through cash in hand is probably more than they lose in this self employed hand out anyhow

  • Given all the complexities involved it does seem to cover most people and, as others have said, will penalise those who have underdeclared which is great. 

    We do qualify as we're a partnership but have only submitted 2 tax returns, the first of which was a 4 month part year over winter (Nov-Mar 2017/18) when we started up where we incurred a loss due to first year depreciation on a van we had only just bought.  This means the profit we made in 2018/19 will be spread over 24 months to reach our 'average' rather than 12 as a part year return counts as a full year I think.  Still, anything will be helpful and much appreciated.

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