From: Take a Walk 
Newsgroups: uk.finance
Subject: Re: Insurance payout for 'loss of earnings'
Date: Mon, 09 Feb 2004 16:50:38 +0000

On Sun, 08 Feb 2004 10:59:52 +0000, Tim wrote:


> "Ronald Raygun" wrote
>> These figures are highly suspect.  Instead of "I don't work
>> every day in the week" do you mean "I don't work every week of
>> the year"?  I don't see how an average profit of £20k a year
>> can be used to justify loss of £2k earnings through one week
>> off work, unless you only work 10 weeks a year and the week in
>> question is provably one of the would-have-been-working weeks.
> 
> What if he works 25 weeks per year on average, earning £2,000 per week for
> each of those - with £30,000 *fixed* expenses?
> 
> His total turnover would be 25 x £2,000 = £50,000 in the year, and profit is
> £20,000.
> 
> Now, with *just one week* off work the figures are:
>   "Turnover" = 24 x £2,000 = £48,000
>    Profit = £48,000 - £30,000 = £18,000.
> 
> Hence a profit of £18K instead of £20K - or "a loss of £2,000 earnings" from
> just one week off work ...

Yes, that pretty much somes it up, I charge £400 per day or £2000 per
week, but am 'on call' as a self-employed service engineer, so some
days/weeks I work, but I can be off for days/weeks between jobs.
The week after the accident I was booked and couldn't make it so the
customer went elsewhere for an engineer - it could have just as well been
a'quiet' week. 
My costs however are pretty fixed: car, workshop, expenses, fuel etc.

So my profit/salary averages around the £20,000 mark, the question about
the 'if I only paid myself £5,000' in the other thread referred to if I
have a really bad year for the rest of the year and only end up with a
profit/salary of £5,000, then my tax bill will be zero- and I will be
looking to reclaim the amount deducted by the ins. co.