# no rights self employed



## fluffybuffy (13 Sep 2011)

hi i am married to sole trader, largly in deth. I have worked soiled for 2 years with no wages as every penny goes to pay deth. Tryed the welfare no joy they saw money in as income even through i proved all was on deth.As it stands husband can not employ me with state benifits or our grown unemployed children and I cant get welfare.Why is this fair and why am i been blamed for trying to suport a business.Where did my rights go we are called non people by the state.Got jA at 8 euro a week took it off me in last buget.This is how my country treat the people that tryed to make it for them selfs.
Cant sell business, cant pay my full deth, cant get welfare= Non Irish person=Wife of self employed man.


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## terrysgirl33 (13 Sep 2011)

Are you talking about him being in debt?

If the business is going badly, can you get a job with a different company altogether?  Then you will qualify for social welfare, and you will have an income apart from the business which is going so badly.


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## Complainer (13 Sep 2011)

fluffybuffy said:


> hi i am married to sole trader, largly in deth. I have worked soiled for 2 years with no wages as every penny goes to pay deth.


It sounds like you're expecting the State to cover your business debts for you. That's not going to happen.


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## z107 (13 Sep 2011)

Complainer said:


> It sounds like you're expecting the State to cover your business debts for you. That's not going to happen.



My understanding of the post was that self employed are not entitled to the social welfare safety net, despite paying for it.


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## fluffybuffy (13 Sep 2011)

*the right to a job recognition*



Complainer said:


> It sounds like you're expecting the State to cover your business debts for you. That's not going to happen.


 

I hope to pay all job deths thank you, due to non payment of clients my point is i can work in my husband stugling business  - with no rights or recognition by the state now or in the future as long as im in this situation. A lady  that works partime for my husband has rights and benifits I do not exsist as an employee by the stste or the welfare sistom.


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## castleforbes (13 Sep 2011)

First off, can you learn how to spell.  If the business is do bad, why not get out of it and get your self a job.  You also say that you have unemployed grown up children, are they on sw.

There are plenty of jobs out there, sure they may not be great paying(Mcdonald's cafe's etc).  I was looking for a job second job last week and I got a offer for the first one that I applied for .

You need to take control of your life and accept that only you and you alone can dig yourself out of this hole.


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## DB74 (13 Sep 2011)

castleforbes said:


> First off, can you learn how to spell.  If the business is do bad, why not get out of it and get your self a job.  You also say that you have unemployed grown up children, are they on sw.
> 
> There are plenty of jobs out there, sure they may not be great paying(Mcdonald's cafe's etc).  I was looking for a job second job last week and I got a offer for the first one that I applied for .
> 
> You need to take control of your life and accept that only you and you alone can dig yourself out of this hole.




You should really proof-read your own posts before commenting on someone else's mistakes.


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## Complainer (13 Sep 2011)

umop3p!sdn said:


> My understanding of the post was that self employed are not entitled to the social welfare safety net, despite paying for it.


Self employed do not pay the same PRSI as employees, therefore they don't get the same cover as employees.


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## DB74 (13 Sep 2011)

Complainer said:


> Self employed do not pay the same PRSI as employees, therefore they don't get the same cover as employees.



In some cases, a self-employed person will pay more PRSI than an employee on the same income, yet still be entitled to less benefits that the employee.


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## terrysgirl33 (13 Sep 2011)

DB74 said:


> In some cases, a self-employed person will pay more PRSI than an employee on the same income, yet still be entitled to less benefits that the employee.




If this is true (I don't know the ins and outs of the situation) then you need to sit down with the accounts from the business from time to time and work out if it's worth your while keeping the business open, or shutting up shop and getting a PAYE/PRSI job.  I'm not trying to be flippant, but if you aren't making enough in the business something has to give.

Ah-ha, details here on what you can claim on a Class S stamp for unemployment.  You do not qualify (usually) for jobseekers benefit, but you can qualify for jobseekers allowance: http://www.citizensinformation.ie/e...ed_people/self_employed_and_unemployment.html


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## DB74 (13 Sep 2011)

I don't mean to be flippant but you clearly don't know what you are talking about.

The vast vast majority of self-employed people are barely making ends meet.

Where do you think they are going to get all these PAYE jobs that you are talking about.


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## Complainer (13 Sep 2011)

DB74 said:


> In some cases, a self-employed person will pay more PRSI than an employee on the same income, yet still be entitled to less benefits that the employee.



In what cases?


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## z107 (13 Sep 2011)

Complainer said:


> In what cases?



Off the top of my head, class A0. Employees pay nothing. The equivalent S class self employed person will pay 4%


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## Complainer (13 Sep 2011)

What is class A0?


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## becky (13 Sep 2011)

Complainer said:


> What is class A0?



It's class A.  Within all prsi classes there is a sub class.  

http://www.welfare.ie/EN/Publications/SW14/SW14_11/Pages/ClassA.aspx


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## Complainer (13 Sep 2011)

Who qualifies for A0?


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## becky (13 Sep 2011)

Complainer said:


> Who qualifies for A0?




Employess whose weekly wage is between €38 - €352 per week, the employee pays A0.


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## DB74 (14 Sep 2011)

As stated above, an employee in Class A0 (weekly wage under €352 - annual wage of €18,304) pays no PRSI at all. So an employee on €18,304 annual wage will pay €361 in PAYE and no PRSI at all.

A self-employed person on the same income will pay 4% PRSI (€732) and €2,011 in PAYE (because self-employed people don't get the PAYE tax credit) which is a total of €2,743.

This is a total of 7.60 times the amount of PAYE/PRSI that the employee pays

To add insult to injury, if the employee works for the self-employed person, the self-employed person must also come up with employer's PRSI which is another tax which amounts to another 8.5% of the gross wage of the employee. This figure comes to €1,556 which brings the total PAYE/PRSI payable by the self-employed person up to €4,299.

So the self-employed person now has to pay a total of PAYE/PRSI every year of €4,299 which is a whopping 11.91 times the PAYE/PRSI paid by the employee ON THE SAME INCOME.

HOWEVER, if this business goes bust, the employee is entitled to statutory redundancy (tax free) & also job seekers benefit for at least 12 months, irrespective of what other assets and/or savings they have.

The self-employed person is entitled to nothing. Granted they can apply for JSA which is means tested but why should the employee get JSB (non-means tested) when the employer / self-employed gets nothing.


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## DB74 (14 Sep 2011)

duplicate


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## DB74 (14 Sep 2011)

Just to add that (on salaries greater than €18,304) a self-employed person will ALWAYS pay at least €2,094 more in PAYE/PRSI than an employee on the same income.

This is due to 2 things:

1. The first €127 per week (€6,604) of an employee's gross wage is exempt from PRSI. This equates to €132 per year (very small amount I know but I don't see the logic in it at all)

2. An employee is entitled to the PAYE tax credit while the self-employed person is not (equates to €1,830 per year)

Also, for salaries over and above €26,000, the employer's PRSI rates rises to 10.75% so even for a salary of €30K, the employer will pay a total of €5,319 more PAYE/PRSI than the employee, again with little or no benefits to show for it.


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## z107 (14 Sep 2011)

very good analysis there DB74.

Before someone posts that self employed get 'better expenses' or somehow are entitled to 'more expeneses' etc, etc... only expenses incurred wholly and solely in the course of running the business are allowable. This applies to both self employed and employees alike.


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## Complainer (14 Sep 2011)

DB74 said:


> Just to add that (on salaries greater than €18,304) a self-employed person will ALWAYS pay at least €2,094 more in PAYE/PRSI than an employee on the same income.
> 
> This is due to 2 things:
> 
> ...


This doesn't quite fit with the reality of self-employed people boasting about keeping 80% of their income.


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## Firefly (14 Sep 2011)

Complainer said:


> Self employed do not pay the same PRSI as employees, therefore they don't get the same cover as employees.



Self employed do not have the option pay the same PRSI as  employees, therefore they don't get the same cover as employees.


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## Firefly (14 Sep 2011)

Complainer said:


> This doesn't quite fit with the reality of self-employed people boasting about keeping 80% of their income.



I think we've seen this one before so I'll try my best with these...

*1/6 of home heating light and insurance for home office expenses*
This can be done, but I have been advised by my own accountant that there could be issues regarding capital gains tax if I ever sell my home as part of it would not be my PPR. In any case, the monies involved are pretty low - maybe 200 euro a year as an expense, resulting in a saving of 40 euro in corporation tax

*equipment cost( lap top etc)
attendance at seminars, training
professional fees/memberships
education costs
*
These expenses are at the discretion of any business owner. I could go on 20 courses this year if I wanted to and I could expense them all. The problem with this though is that I would have to pay for them and I would be left with little or no income. Not much point saving tax if you have to increase your expenses to a point where you have no income. 

*subsistence
taxis
travel mileage(kilometerage?)
business expenses incurred
*
There are strict guidelines for all of these. Of course you can expense what you want to show different annual profits, but the rules for these expenses are treated differently for taxation purposes. As an example, say I have to drive 20 kms to a client. I can quite easily put down 10euro per km for mileage if I want to and I will pay less corporation tax. However, anything above the civil service rates attracts income tax which is higher than corporate tax. Just to add, I cannot charge mileage to my normal place of work either, so if, as in my case, I perform all of my work for one employer I can't claim mileage for this, unless I have to travel to an additional site which rarely happens.

*pension*
This is one area which AFAIK is still attractive to self-employed. My own company can pay quite a large pension payment to me annually and it is deducted as an expense. It can be based on what the fund would have to be worth to sustain me at half my expected final salary (I could be wrong on the %). The reason for this is pretty straight forward though...I am not entitled to most or all of the old age pension and therefore the state is giving me relief now so it doesn't have to give me money later. Of course I take all the risk here...my pension could turn out to be a real winner (in which case I will pay income tax which in essence gives the state back some/all of the relif I have received) or it could be worth sweet fanny adams. In any case, I will have to put this money away now for the long haul as I am not entitled to a defined benefit pension that others are. 

I for one would be in favour of a system where *all *employees....civil servants, private sector and self-employed would have the same basic pension contribution requirements (% of salary) and entitlements. Anything above this could be made at an individual level with no taxation relief given.

Firefly.


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## z107 (14 Sep 2011)

Complainer said:


> This doesn't quite fit with the reality of self-employed people boasting about keeping 80% of their income.



That's not reality.

In reality, there are audits. If I decided that I was going to keep 80% of my income this year, I could do that. However, red flags would be raised when my accounts are submitted.

Anyone can decide not to pay tax. People can work cash in hand, or declare rental income etc, etc... However, it doesn't make it legitimate.

Are you privy to karak's accounts? How do you know Karak hasn't been audited, or wont be audited? Should I post here saying that I'm an employee and get to keep 90% of my income because I fiddled my tax credits? It's easy to do.


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## DB74 (14 Sep 2011)

Complainer said:


> This doesn't quite fit with the reality of self-employed people boasting about keeping 80% of their income.



What's the problem here?

Karak has allowable business costs which equate to 20% of his invoices. He then pays tax (PAYE, PRSI & USC) on the remaining 80%.

He still can't get JSB or illness benefit or other benefits that Class A PRSI employees get.

Also that thread is over 3.5 years old

You won't hear to many self-employed people "boasting" about anything, to use your phrase


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## Firefly (14 Sep 2011)

To be fair there are expenses that fall into a grey area such as a mobile phone and a laptop. I can expense both of these as company expenses but am not meant to use them for non-business use. The enforecement of this IMO and the monies invloved would not be worth Revenue's while pursuing. For all the risks of being self-employed this harldy makes it worthwhile.


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## Complainer (14 Sep 2011)

DB74 said:


> What's the problem here?
> 
> Karak has allowable business costs which equate to 20% of his invoices. He then pays tax (PAYE, PRSI & USC) on the remaining 80%.


So you 'retain' means 'pays tax (PAYE, PRSI & USC)'? That's not my understanding of 'retain'.


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## Firefly (14 Sep 2011)

Complainer said:


> So you 'retain' means 'pays tax (PAYE, PRSI & USC)'? That's not my understanding of 'retain'.



Would you care to reply to my earlier post (#24) regarding the expenses listed?


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## z107 (14 Sep 2011)

Firefly said:


> To be fair there are expenses that fall into a grey area such as a mobile phone and a laptop. I can expense both of these as company expenses but am not meant to use them for non-business use. The enforecement of this IMO and the monies invloved would not be worth Revenue's while pursuing. For all the risks of being self-employed this harldy makes it worthwhile.



I wonder how many employees are posting on here with company computers.


(Employees as well as self-employed could use company phones and laptops for non-business use. I'm sure that if the revenue wanted to, they could legitimately insist on BIK being paid)


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## Firefly (14 Sep 2011)

umop3p!sdn said:


> I wonder how many employees are posting on here with company computers.
> 
> 
> (Employees as well as self-employed could use company phones and laptops for non-business use. I'm sure that if the revenue wanted to, they could legitimately insist on BIK being paid)



That's very true.


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## DB74 (14 Sep 2011)

Complainer said:


> So you 'retain' means 'pays tax (PAYE, PRSI & USC)'? That's not my understanding of 'retain'.



Yep, that's what I read from his post

He doesn't mention tax so I think it's safe to assume that he means the 80% is before all taxes.


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## DB74 (14 Sep 2011)

Just to clarify, if someone makes a net profit (sales less expenses) of €30K, they will pay PAYE, PRSI, & USC of roughly €6,000 so their take-home portion is 80% of their NET profit.

So therefore, on the assumption that their actual sales HAS to be greater than the €30K net profit, their take-home HAS to be less than 80% of their sales.

If we assume that in order to earn this net profit figure of €30K they would have had to generate sales of €37,500 (estimate allowable business expenses at 20% of sales) then their take-home percentage is actually only 64% of sales

It is only at a net profit of €26,000 that a self-employed person's after-tax take-home pay is greater than 80% of their NET profit, let alone their sales.

And if someone earned a NET profit of €10K, they would pay taxes of roughly €950 which equates to a take home of 91%. However if they had to generate sales of €12,500 to earn that €10K net profit, their take home would equate to just 72.4% of their sales, which is still nowhere near the figure of 80% mentioned by Karak


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## Complainer (14 Sep 2011)

DB74 said:


> Yep, that's what I read from his post
> 
> He doesn't mention tax so I think it's safe to assume that he means the 80% is before all taxes.


Seeing as the general context of that thread is about take-home pay for contractors vs employees, I think it is a very UNSAFE assumption to assume that he means 'before all taxes'. 



DB74 said:


> You won't hear to many self-employed people "boasting" about anything, to use your phrase


You're right, of course. They are generally keeping their heads down so as not to draw attention to how they pay less tax than employees. I'm sure Kerak will get booted out of the select club for letting the cat out of the bag.


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## DB74 (14 Sep 2011)

Yes ignore my other post please where I've run the figures to show that your assumption about Karak doesn't add up.


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## Firefly (14 Sep 2011)

DB74 said:


> Yep, that's what I read from his post
> 
> He doesn't mention tax so I think it's safe to assume that he means the 80% is before all taxes.



I think it is implied that after all the expenses are deducted that the income tax would only amount to 20% of total revenue.

Take the following example:

Invoice Amount      in the year : 100,000
Pension Contribution 30,000
Other expenses        10,000
Salary                    60,000
Net Profit                NIL

Total income tax for a single company director on 60K is approx 15k per annum according to Deloitte tax calculator.

So, this can be represented as paying only 15% of total income. However, 30k has to be put away into a pension (which will attract income tax later anyway (*if* it makes money)) and expenses of 10k are paid for - again money gone. So, whilst it is possible to pay 15% tax on total revenue...you're really only earning 60k a year. It's like saying a large PLC only pays a small percentage of tax on revenue...it ignores the costs.


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## z107 (14 Sep 2011)

Complainer said:


> You're right, of course. They are generally keeping their heads down so as not to draw attention to how they pay less tax than employees. I'm sure Kerak will get booted out of the select club for letting the cat out of the bag.



Troll.


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## Firefly (14 Sep 2011)

Complainer said:


> You're right, of course. They are generally keeping their heads down so as not to draw attention to how they pay less tax than employees. I'm sure Kerak will get booted out of the select club for letting the cat out of the bag.



I really wish there was a cat in the bag. I would again invite you to reply to my earlier post regarding these expenses. Perhaps I (and my accountant) are missing something?


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## Complainer (14 Sep 2011)

DB74 said:


> Yes ignore my other post please where I've run the figures to show that your assumption about Karak doesn't add up.


Your figures are not Kerak's figures. He specifically refers to '80% of invoiced hours'. Invoiced hours is a gross figure, not a net figure. He's self-employed, and he's paying 20% of his income in taxes, and keeping (or 'retaining') the other 80%.


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## orka (14 Sep 2011)

Trying to get vaguely back on topic...





DB74 said:


> Also, for salaries over and above €26,000, the employer's PRSI rates rises to 10.75% so even for a salary of €30K, the employer will pay a total of €5,319 more PAYE/PRSI than the employee, again with little or no benefits to show for it.


It’s a bit of a stretch to describe the employer as paying ‘X more PAYE/PRSI than the employee’ as if it was personal PRSI to the employer. Paying an employee’s insurance is a cost of doing business – it shouldn’t be equated as personally paying into something which will result in personal benefits. It is no different than a self-employed person paying VAT on goods or services provided – again, it’s a cost of doing business, it doesn’t make it part of the person’s personal taxation.
You also seem to have completely missed the point that the government receives much more total PRSI as a result of an employee’s employment than from a self-employed person because the self-employed do not pay the 10.75% employers PRSI. Looking at total PRSI (employer plus employee) received by the government:
On 18K income the government receives €1,530 (employee) vs €720 (self-employed).
On 30K, the government receives €4,161 (employee) vs €1,200 (self-employed).
On 50K, its €7,111 (employee) vs €2,000 (self-employed).

Looked at another way, 4% seems a reasonable amount to pay towards a contributory pension which both employees and the self-employed get. The 10.75% employer’s PRSI then provides the employee with insurance (paid for by the employer) to provide some health benefits plus benefits in case the employment contract is not continuing for some reason. The self-employed do not make this contribution so the benefits are not provided.


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## Firefly (14 Sep 2011)

Complainer said:


> Your figures are not Kerak's figures. He specifically refers to '80% of invoiced hours'. Invoiced hours is a gross figure, not a net figure. He's self-employed, and he's paying 20% of his income in taxes, and keeping (or 'retaining') the other 80%.



He can't be keeping or incurring 80% of income as he is incurring expenses - this is money gone. He's providing tax based on income and ignoring his expenses...that's just providing misleading information.


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## DB74 (14 Sep 2011)

Complainer said:


> Your figures are not Kerak's figures. He specifically refers to '80% of invoiced hours'. Invoiced hours is a gross figure, not a net figure. He's self-employed, and he's paying 20% of his income in taxes, and keeping (or 'retaining') the other 80%.



Invoiced hours are indeed a Gross figure and it is almost impossible to retain 80% of this figure AFTER all expenses and taxes are paid, as my example has shown

Even if someone's expenses equate to 15% of their Gross, their profit is then 85% of their Gross and their tax would be minimum 20% of this 85% profit figure. 

So for every €100 invoiced, €15 would be spent on expenses and €17 would be spent on taxes leaving the contractor with just €68 from his invoiced amount of €100

This €68 retained equates to 68% of their invoiced figure and nowhere near the 80% claimed by Karak.


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## Firefly (14 Sep 2011)

DB74 said:


> Invoiced hours are indeed a Gross figure and it is almost impossible to retain 80% of this figure AFTER all expenses and taxes are paid, as my example has shown
> 
> Even if someone's expenses equate to 15% of their Gross, their profit is then 85% of their Gross and their tax would be minimum 20% of this 85% profit figure.
> 
> ...



That is after corporation tax. Anything the contract takes home is subject to PAYE then. Of course they can leave the money in the company but there are now rules on limits here for this. In any case it will be taxable eventually anyway.


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## DB74 (14 Sep 2011)

The example I'm using is for a sole trader, not a limited company.


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## orka (14 Sep 2011)

That linked single post has really dragged this topic off thread and I don't think it even does what the poster intended.  It's very obvious from reading the whole thread that the post was intended to give information on what expenses could be legitimately offset - and it seems obvious to me that he meant 80% was the contractors gross income on which tax etc. would be paid - nowhere in the thread is there a nudge nudge wink wink, here's how to fudge your taxes guide.  So there's about 20 wasted posts here gumming up the thread for what honestly looks like trolling.


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## fluffybuffy (14 Sep 2011)

Thank you, I was beging to think nobody got it, selfemployed peoply and there familys are currently been penalized for trying to have made it for themselfs, *just equal rights nothing more nothing less.*


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## SarahMc (14 Sep 2011)

castleforbes said:


> First off, can you learn how to spell.....


 
Castle, your spelling, and punctuation leave a lot to be desired. If you really want to comment on the literacy level of others, ensure your own is exemplary.


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## WaterSprite (15 Sep 2011)

Complainer said:


> This doesn't quite fit with the reality of self-employed people boasting about keeping 80% of their income.



I don't think that his post reflects an actual "reality", rather an ill-informed view of the tax system as it applies to the self-employed.  Yes, in reality, that chap appeared to be boasting, but his story is just one, and a fairly dodgy looking one at that.  



Complainer said:


> You're right, of course. They are generally keeping their heads down so as not to draw attention to how they pay less tax than employees. I'm sure Kerak will get booted out of the select club for letting the cat out of the bag.



Self employed people do pay more taxes (percentage-wise and including all the extras like PRSI) than PAYE workers. We used to have to pay far more PRSI (before the ceiling for PAYE was lifted). We don't get PAYE allowance.  No paid holidays, which in Ireland amounts to over one working month paid. Legitimate expenses are allowed but they are expenses that are incurred *because* we are self-employed.  For e.g. working from home means larger electricity bills.  The only actual advantage to being self-employed is that we don't have to pay tax month-to-month, but can pay it all in a lump sum in November (via ROS) so there's a benefit of interest as it (slowly) accrues for those 11 months.  That's it. 

The benefit of the PAYE allowance and the much more extensive social welfare benefits available to PAYE workers vastly outweighs any perceived advantage to being self-employed.

I'm actually ok with all of that, but I do think it's terribly unfair that there is such a range of benefits closed to the self-employed that are open to PAYE workers, not based on their own PRSI contributions (which are more or less equal now, although self-employed still pay slightly more) but based on the employer contributions, which is the missing link.  It's particularly unfair to those self-employed who themselves employed others, where those others are now eligible for JA, but not the actual person who ran the business.

As far as those who say they claim the kitchen sink and all against expenses, this is not a reason to say that self employed pay less tax; it's simply that those people are tax evaders.  Being self-employed (like all self-assessment taxes) makes it easier to evade tax, but that's a completely different thing to measuring a tax compliant self employed person to a PAYE worker.

Complainer, I've a lot of respect for you on here, but what you'd said is not correct and it's a pervasive myth that needs to be debunked.  If there is to be a war, it should be a war between those who are tax-compliant (or are at least trying their damnedest to be so) and those who aren't.

Sprite


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## queenlex (21 Mar 2012)

DB74 said:


> The self-employed person is entitled to nothing. Granted they can apply for JSA which is means tested but why should the employee get JSB (non-means tested) when the employer / self-employed gets nothing.


 
Can I ask, sorry for butting in as it were, but I'd like to possibly follow a dream and wondering if the worst was to happen and I set up a company and it failed...  How much would I get in JSA (given I have no property etc, i.e. dont own a house, etc.) to live on while I looked for a new job approximately could you basically starve to death or end up homeless etc. is what I want to know basically bc I hate my job and can see it possibly affecting my health if I do it for any length of time.

Many thanks for any response,

Q


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## psca (16 Apr 2012)

Can you not pay Class A stamps? This is a question as i am reading conflicting posts.


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