With all the advantages that freelancing offers, from the flexibility to work where you want on the projects that interest you, to being your own boss, it's no wonder that almost 5 million people ‐ or 15% ‐ of the UK workforce are self-employed. But as the challenges associated with the coronavirus pandemic mount, a light has been shone on the difficulties faced by freelancers.
Despite losing income, many have been left out from government measures aimed at financially supporting people, and are not entitled to certain benefits that employed people receive, including holiday and sick pay. In addition, finding healthcare and car insurance during COVID are both much more complicated than they were beforehand. In our guide Coronavirus: Help for Freelancers, we answer some of the most frequently asked questions relating to this topic and uncover the current financial and mental health support available to freelancers.
The Self-Employment Income Support Scheme (SEISS) was launched to support self-employed individuals who have suffered a loss of income due to the coronavirus outbreak. It is made up of four taxable HMRC self-employed grants worth up to 80 percent of individuals' average monthly profits over the past three years. The first three government self-employed grants have now closed, with the fourth (covering the months of February, March, and April) being announced on the 3rd March.
Eligibility for the fourth grant is based on the following:
You can apply for the grants through the Government website using your self-assessment unique taxpayer reference (UTR) number and Government Gateway user ID. You will also need a UK bank account and national insurance number. To ensure you get the grant, HMRC advises that you keep a record of the impact the coronavirus has had on your business, which may include details such as the dates your business had to close, accounts showing a decrease in revenue, or examples of contracts being canceled.
You can continue to work elsewhere while receiving the grant and you don't need to pay the money back. Your eligibility also isn't affected if your business recovers after you've made a claim.
Self-employed workers have also been given more time to pay their tax bills. Each year, those who work for themselves and pay their tax through the self-assessment system have until 31st January to do so. Some businesses also have to make a payment on account in July too. Now both of these payments can be deferred until January 2022.
The money you receive is subject to income tax (you pay tax on any income you receive above the £12,500 personal allowance) as well as self-employed national insurance.
With as many as 2.9 million freelancers, contractors and newly self-employed individuals still unable to claim a grant many people are also rightly arguing that these measures don't go far enough. If you are someone in this position, you may instead be eligible for one of the options below.
Chancellor Rishi Sunak unveiled the Bounce Back Loan Scheme to support those people who fall through the gaps in the SEISS — including those who set themselves up as a limited company. Under the scheme, self-employed individuals can apply for a 100 percent state-backed loan worth up to £50,000, with no interest charged or repayments needed in the first 12 months. Recent changes now mean you have longer to apply, and also have the option to 'top-up' if you haven't borrowed the full amount. You can find out more on MoneySavingExpert.com.
If you're self-employed, you aren't entitled to statutory sick pay, but you may qualify for benefits if you're sick or self-isolating. If you have come into contact with someone who has tested positive for coronavirus and receive notification that you need to self-isolate for 10 days, you can apply for universal credit — but only if you can't operate your business from home and it's disrupted. The amount of universal credit you will get depends on various factors, including your costs, savings, and income. You can find out more on the Government website.
The Minimum Income Floor (MIF) is what's used to calculate universal credit payments — the idea being to simplify the process for self-employed people on fluctuating incomes. This was temporarily moved at the start of the pandemic and has now been extended until April 2021. If you have worked for yourself for more than a year, you are treated as someone who is working 35 hours per week on the national minimum wage for your age group. Earn less than this from month to month, however, and won't see an increase in universal credit payments to make up the difference.
If you're sick, you can apply for the new-style employment support allowance (ESA) and claim from the first day of sickness (instead of the eighth day). This only applies where households are ill or self-isolating, and not, for example, to parents who have to take time off to care for their children due to school closures. Again, how much you get depends on various factors such as your age and what stage your application is at, but the maximum payout is £111.65 a week.
Even if you are not able to claim any of the above options, it's still worth checking that you're claiming all the other benefits and support you're entitled to. For example, can you take a mortgage payment holiday, or delay your energy bills? Find out more about claiming benefits towards housing and other costs here.
With all the change and stress caused by the coronavirus pandemic, it's no surprise that many of us are struggling to maintain our mental wellbeing — but rest assured that there is support available to you. The following links contain tips on how to cope during this difficult time:
HMRC has set up a helpline for self-employed individuals and businesses who are concerned about paying their tax due to coronavirus. You can contact HMRC Monday to Friday from 8 am to 4 pm by calling them on 0800 024 1222.
We fully support the freelancing community, with all of our trainers and some of our delegates being freelancers who have been financially negatively affected since the start of the pandemic. We hope that the tips above can offer some sort of financial support and much-needed relief to those who are struggling at this time.

by Emma Gibbins | 27 Sep 23