GOVT Scheme for the self employed - how do they define self employed?

[fathippy]

Has anyone seen any full details of what "self-employed" means with regards to the financial assistance provided by the government.

Whilst they are very clear and detailed about amounts, averages of previous years filings etc etc, they do not seem to make any effort to define what "self employed" means.

The easiest route I guess would be the "self employed" pages of the self assessment, but to me there is no reason why self employment couldnt be filed and taxed under the "property" pages, or even solely under "capital gains" for a larger scale, buying and selling operation. In extremis you could probably file a money lending enterprise solely in the "interest" pages!!

Is there any guidance anywhere? OR have I missed an obvious steer in the existing description?

 

[Mr D]

You could look what government means by self employed.

Or take your chances and apply for money.

 

[SteveHa]

Has anyone seen any full details of what "self-employed" means with regards to the financial assistance provided by the government.

There are a plethora of tribunal cases addressing this.

The easiest route I guess would be the "self employed" pages of the self assessment, but to me there is no reason why self employment couldnt be filed and taxed under the "property" pages, or even solely under "capital gains" for a larger scale, buying and selling operation.

No reason apart from it would be wrong. If buying and selling property, for example, is done in the nature of trade then it's income and taxed as such. Capital Gains has nothing to do with it.

In extremis you could probably file a money lending enterprise solely in the "interest" pages!!

Again, no. To start with, look up the badges of trade

Is there any guidance anywhere? OR have I missed an obvious steer in the existing description?

Yes, look through the tax tribunals cases. http://financeandtax.decisions.tribunals.gov.uk//Aspx/default.aspx

 

[UK Contractor Accountant]

"self-employed" means

They have said - funding will be worked out from the self-employment pages of tax returns filed.

 

[fathippy]

No reason apart from it would be wrong. If buying and selling property, for example, is done in the nature of trade then it's income and taxed as such. Capital Gains has nothing to do with it.

I appreciate that I presented three options, each one slightly more extreme than the previous. But if all are wrong, are you suggesting that it is impossible to be a self-employed landlord, or that there is an alternative way to present this, if you so choose, which is to file it under self-employment rather than property.

 

[SteveHa]

It's not impossible, but there are nuances and there are intrinsic differences between treatment of self-employed income and expenditure compared with lettings income and expenditure.

There have been tribunal cases exploring this in depth (one of the more notable in recent years being Ramsay - http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j6280/TC01871.pdf

If you want to go back further you will need to hunt down the judgement in Salisbury Housing Estate Ltd, which is not freely available)

For when capital and income from property become an issue, have a read of Terrace Hill - http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j8260/TC04282.pdf

You could also have a read of http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j8864/TC04897.pdf

Oh, and knowing this stuff is why people pay accountants, and why accountants are fairly unforgiving of people who think it's all nice and easy.

 

[fathippy]

Oh, and knowing this stuff is why people pay accountants, and why accountants are fairly unforgiving of people who think it's all nice and easy.

Not for a minute suggesting that it was easy or straightforward, and I am sure there are plenty of sensible reasons for treating two things separately. I think we have moved away from the slightly more "generic" thought in the original post, which was whether the incredibly complex and nuanced way of dealing with tax returns was a fair and reasonable way to make boundaries for more of a humanitarian problem.

I appreciate that there will always be boundaries whether it be by amount, or postcode, or age, or weight etc, but in most/all cases there are sensible and clear reasons for their use.

My concern was that the different pages in the tax returns are there for some very good logistical and application based reasons, but perhaps these do not map obviously onto what is happening at the moment.

 

[SteveHa]

My concern was that the different pages in the tax returns are there for some very good logistical and application based reasons, but perhaps these do not map obviously onto what is happening at the moment.

Legally, and more importantly, having evolved that way, the Tax Return is very fit for purpose, provided that the understanding of the law and the purpose of each section is there.

And therein lies the problem. Accountants are valuable because the law is far from simple, and has evolved in a very contrary manner. What seems rudimentary can quickly prove to be extremely complicated (and the opposite is true, what seems on the face of it to be very complicated, can often prove to be very simple).

And my comment regarding why people pay accountants wasn't aimed at you, but rather at the many DIYers who post on here who seem to think it's all a casual stroll in the country.

 

[UK Contractor Accountant]

Or take your chances and apply for money.

He cant - HMRC will write to all that all eligible to claim based on self-employed pages of tax returns filed.