You can stop paying self-employment fees, these are the conditions of the Government

You can stop paying self-employment fees, these are the conditions of the Government

Yesterday, at a press conference after the Council of Ministers, President Sánchez announced a series of measures to try to help citizens and businesses in the face of the economic crisis caused by the coronavirus. Many companies have gone from one day to another to turnover zero. Also many self-employed people who see their income have been volatile. And of course there were calls to stop paying social security contributions, and many have been disappointed when this was not announced. Yesterday the ATA representative, Lorenzo Amor, demanded that at zero income, zero contribution.

This premise is fulfilled with the cessation of activity. There is no income and the fee is not paid. Logically, it is not possible to invoice, because there is nothing to invoice either. Furthermore, the Government announced that the conditions for access to unemployment for the self-employed are being made more flexible, even if they have not paid enough contributions beforehand. It must be taken into account that since last year it is a compulsory contribution for everyone, so the whole group would be protected by this issue. Furthermore, if the self-employed have employees under their care and have presented an ERTE, the contributions of these employees will also be paid by the State. Therefore, while the crisis lasts, the cost of personnel hired by the self-employed will be zero. It must be taken into account that VAT and tax payments can also be deferred to the following months. And the self-employed will receive their unemployment benefit according to the contribution base, the minimum in most cases.

The problem for the sector is that since the introduction of the voluntary and then compulsory cessation of activity for the self-employed, very demanding conditions have always been maintained, so that more than half of the applications for unemployment for the self-employed have been rejected. The government has promised flexibility, but it remains to be seen if this will be put into practice, and it has assured that it will be paid even if the minimum conditions required for it to be granted are not met. The truth is that on other occasions a similar promise has been made, to relax the requirements, but this has not been fulfilled and the cessation of activity continues to be very profitable for the Social Security Fund. In this sense, Article 17 of Royal Decree Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of COVID-19Extraordinary provision for cessation of activity for those affected by the declaration of the state of alarm for the management of the health crisis situation caused by COVID-19.

Exceptionally, and for a period of one month from the date of entry into force of Royal Decree 463/2020, of 14 March, declaring the state of alert for the management of the health crisis situation caused by the COVID-19, or until the last day of the month in which the state of alert ends, if this state of alert is extended for more than one month, for self-employed workers or the self-employed, whose activities are suspended, by virtue of the provisions of the aforementioned Royal Decree, or, otherwise, when their turnover in the month prior to that for which the benefit is requested is reduced by at least 75 per cent in relation to the average turnover for the previous six-month period, shall be entitled to the extraordinary benefit for cessation of activity regulated in this article, provided that they meet the following requirementsa)

Be affiliated and registered, on the date of the declaration of the state of alarm, with the Special Social Security Regime for Self-Employed or Autonomous Workers or, where applicable, with the Special Social Security Regime for Sea Workers.b) In the event that their activity is not directly suspended by virtue of the provisions of Royal Decree 463/2020, of 14 March, accredit the reduction of their invoicing by at least 75%, in relation to that made in the previous six months. c) Be up to date with the payment of Social Security contributions. However, if on the date of suspension of the activity or reduction of the invoicing this requirement is not met, the managing body will invite the self-employed worker to pay the contributions due within a non-renewable period of thirty calendar days. The regularization of the overdraft will produce full effects for the acquisition of the right to protection.

From rent, electricity, communications, labour and tax advisers, etc. In addition, if we have cancelled our status as self-employed, these expenses cannot be deducted later, so we have to process the cancellation and then the registration, in many cases if we cancel our status, the businesses that have an administrative license may have to apply for it again. Perhaps it would help if the BOE published a decree on urgent measures to facilitate the approval of a line of guarantees on behalf of the State for companies and self-employed workers of up to 100,000 million euros, covering both the renewal of loans and new financing by credit institutions, financial credit establishments, electronic money institutions and payment institutions, to meet their needs. If they apply to cease activity for a month or two, then they would not be able to resume their activity under the same conditions. In this case, many will also consider taking advantage of this measure and prefer to pay their 60 euro fee and keep their savings. Most businesses will have to face the crisis by pulling out their own savings.

Most businesses will have to face the crisis by pulling their own savings. What many are demanding is liquidity, to be able to face the payments they have committed to so as not to enter into a spiral of unpaid bills, which as we saw with the economic crisis of the construction bubble takes a lot of companies away. I understand the request to not pay the fee of the self-employed without the need to go to the cessation of activity, which for many will not be a solution, that there is no need to pay either of employees who have been affected by an ERTE.

The aim would be for companies not to come out of this crisis with a debt so large that it makes them unsustainable.The members of the collective who wanted freedom of choice of contributions, to be able to create their private pension plans, their savings or investment plans and not to put all their eggs in the same basket. Well, gentlemen, it is time to make use of this money that has been saved. Because if you pay the minimum wage, the severance pay will be just over 660 euros, which will not be enough to cover other expenses that the self-employed will have to continue to face in order to continue operating after the crisis.




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