Calling all freelancers! Are you having problems with the government’s recently announced assistance scheme?
The UK government's new COVID-19 packages cover a fair amount of the workforce, but many people have also fallen through the cracks!
Representatives from the government have been in touch with my amazing COO @John Down to identify issues that freelancers are experiencing – beyond those that they’re already aware of (see list below).
How are you coping? Are you having problems with the government’s recently announced assistance scheme?
https://the-dots.com/asks/government-assistance-for-freelancers-please-share-your-questions-any-advice-re-navigating-the-govt-s-new-scheme-5059
It’s worth mentioning that the government is already aware of the following issues and is apparently working to resolve them:
- Freelancers who have started freelancing in the last tax year
- If you are having problems applying / qualifying for Universal Credit
- Small companies that have yet to make a profit being excluded
- Small companies unable to get / having problems getting loans through the CBILS programme
- Freelancers who have previously paid themselves from their companies by dividends not being supported
- Freelancers who fall above the £50k profit cap
- The low level of the monetary support
Please add any problems (beyond those above) that you’re having with the scheme. We’ll then feed these back to the government asap, so they know the system is not working for you.
Also, if you see someone's comment you can help with, please jump in!
If we support each other we really will get through this, just you watch.
Thanks everyone.
Replies50
- Hi there - I'm a freelance Graphic Designer who switched from sole trader to limited company this year (June 2019). I don't pay myself via PAYE so unfortunately fall between the gaps of furloughed worker scheme and self employment income support.
- Also, what provision is there for PAYE freelancers if a fixed-term contract naturally ended? It's not realistic that you can go back to your 'employer' (aka client) and ask them to rehire you so that you can get on the furlough scheme. Unless it's stipulated by the government, most companies won't be keen. It might make more sense for PAYE freelancers to join the self-employment scheme.
- over 50% of my income is from PAYE so i receive nothing
- also, can we look into the legal term of 'continuity of work' can thos be applied for people who were paye but since freelance casually with the same company?
- Hi Pip, I'm a PAYE freelancer and taxed at source. However, I'm not registered as self employed or a limited company, so currently fall through the gaps. I work on a series of short-term contracts throughout the year, typically ranging from one to four months. I'm put on the payroll for one company but use an umbrella company to process the PAYE for other clients. Although I'm an 'employee' for tax purposes, it's unrealistic that companies will want to furlough me as I'm a freelancer.
- Hi Pip,I know this is a common problem that they know about but thought I would still post on here.I was made redundant in January 2019. As I had only been at the company 8months I wasn't entitled to anything. I decided to take the leap to go freelance due to the lack of design job opportunities where I live. So I turned full time self employed/freelance in March 2019.I won't be entitled to any help as I only had a months earnings of freelance in my 2019 tax return (so not 50% of years inclome). I have a full years 2019/2020 of accounts, invoices/proof of income but none of this will be taken into account. With only days away from the tax year end, this is gutting.I will be getting no help, and yet shortly handing over a lump sum of taxes. ( I know they say we can hold on paying our taxes for now, but it will still need to be paid eventually, so spending that money with no vision of knowing we can make that money back seems like a risky move to me).I lost my ongoing client on March 17th when they made many people redundant. And work has stopped meaning my income dissapeared overnight, which is extremely worrying.I do understand there are fraud risks, but there must be some way to help. Especially as there are so many of us with our invoices/accounts in order.They have opened themselves up to this exact same fraud risk by re-opening the 2019 deadline, which in my opinion is extremely unfair.Thank you for trying to give us a voice.
- Hello,I have been registered with an Umbrella company to serve as my Limited company (just as so many recruiters tell you to do) but now I fall through the goverment's scheme as it looks like I worked for only one company (Parasol) instead of working as a freelancer ...
- Hey Pip,I've just become fully freelance in January this year, but I've been registered as a sole-trader since 2016. I've only been making extra "pocket money" up until January 2020 that has supplemented full-time income. So averaging my earnings from those past years will result in measly compensation that definitely won't help me right now - not to mention it wouldn't be available any time soon! I'm just having to rely off my savings right now - but this money will soon run out and so it's a pretty nerve-wracking time.
- One major issue for me is that, even if I were eligable for 80% of my salary (which I'm not because it's mostly dividends) the stipulation that you're not allowed to work if you're furloughed is incompatible with our way of working. In order to line up work and ensure ongoing future projects can take place, business owners and freelancers can't afford to stop working even for a moment. For that reason I won't be applying for furlough
- I’ve only been a freelancer for 18months, jumped into the boat after being made redundant, started with absolutely nothing and am slowly building up clients. 80% of my earnings for my last tax return would just about pay for a months food shop!I’m having to live off my redundancy money as having this in the bank stops me claiming for UC and ESA.Nothing that has been proposed supports me at all, in fact it’s making me consider going back into FT employment.
- @Barry Tranter I'm so sorry to hear that. Would you mind explaining why this is the case and we'll feed this back. Thanks Barry. Pip
- Hello, I hope you're all staying safe :-)"Freelancers who have previously paid themselves from their companies by dividends not being supported" has already been mentioned, but I'd like to add a few points, if I may...- most bigger companies, eg. advertising agencies, would ONLY work with limited company freelancers.In order to get jobs, I had to switch from sole trader to limited company - a need, not a choice- the combination of salary and divudends for limited company directors/freelancers is perfectly legal and what goes to the government from their profits is not far off from sole traders, eg. at a 20K profit the difference is £300, at 30K it's £700. Plus, limited company freelancers need to spend at least £1000 on accountants/year.I'm just mentioning that as there seems to be this myth around that freelancers go limited in order to having to pay much less to the government and therefore contribute much less than sole traders.That's not the case!Take care!
- Hi Pip,I am a freelancer that have just registered as a Sole trader ( during the last tax year). No assistance guaranteed for me :/
- Hi Pip. There is no assitance for us. I have no support from any of the packages they have announced. It will ruin our industry.
- Hello Pip,Really pleased you posted this. And there was also a good article on the Design Week website this morning. I fall in to the fifth point above, and I've spoken to a friend in the TV industry who said it affects her and most of her colleagues as editors and film crews and the like.We got a real sense the government were trying to help everyone in their announcements but as you say, the packages mean there are lots of people falling through the (not insignificant) cracks. It feels like we are being singled out as people who were dodging the system, when in reality we were advised by recruitment agencies and accountants that a Ltd. company and dividends – all of which we pay tax on – was the route we should follow.Where is the support for us?I echo the other comments here – tough times, I hope everyone gets through it.
- I am a sole trader in PR, and have been for five years. I’ve given people jobs, I’ve created business for my clients and I’ve paid around over 6 figures in tax. Until recently I was on over £50,000 profits, so I am not eligible for any help from the government. I have talked to my network of PR freelancers and the majority are also not covered. I am down a huge amount of work and only have a small amount of savings.I would appreciate it if cases like ours could be put to the government. A cap of £50,000 with no regard for how much we’re making now, and with no regard for London weighting, seems incredibly short-sighted.
- Unfortunatetly, I fall in both the Limited Company and less than a year in business gaps! Yes, they have said that we can delay paying our taxes to Jan 2021– presuming that we can use that 'banked' money to live off but we have no idea how long this will go on for, so is that sustainable?Universal credit has been tricky to get an appointment but just today they've sent me an email to say that they will contact me to get things moving. Which is a sign of hope as the phone lines have been jammed for days. Who knows when and if it will happen and actually if I'll be able to live on what I get!!With no schools open, having a 7 year old home to teach and entertain makes it impossible to find the little work that I'm guessing is out there!!If anyones looking for some freelance brand and design support, please shout :)It's a very challenging time for all.Stay safe and well x
- Yes!I've taken on several contracts in the past year for bigger tech brands that onboarded me on PAYE, even though the contracts were short-term and paid out at day-rate.So, on paper, I don't have more than 50% of my incoming work as 'freelance work' — Although I've been a freelancer for three years.
- I’ve worked as a Freelance Illustrator for less than a Year and before the pandemic started, I had 3 Full Time job interviews lined up to which they were all then cancelled :(I have signed up for Universal Credit/Job Seekers but am having a slow response from Gov.uk when I need the support right now. It’s so sad to see so many of us in difficult situations!I feel like there is no way out right now. It’s been difficult. I need any sort of financial support to get through.I hope everyone is safe and well in these difficult circumstances!
- Yes I took a part time temp post to help pay my bills and the income from this is slightly higher than my photography work, so I get nothing and my income is half. I don’t qualify for Universal Credit as my wife is a student. We also know someone who waited 12 hours to get a reply from the Universal Credit people on the phone. I am just extending my overdraft until things calm down
- What if you use umbrella companies? Because they do my PAYE, so I'm not in Self Assessment ??
- Lack of immediate support and funding is the biggest issue, people have bills to pay now, not at the end of the summer.UCredit is overwhelmed, buggy and means tested and has a waiting period that runs in to weeks if not months.Govt. scheme won't be online until July at the earliest, and then by invitation from HMRC.
- For me in terms of support, along side Director’s paying themselves through dividends in a Limited Company, the other one is where director’s loans are being paid down instead of a salary who are also as yet unsupported.
- I live with my Father. Have some savings. Work across film and livestream both industries have both halted - probably for many months. Because I worked last 3 tax years mixed PAYE and selfemployed and my employment made majority I am not entitled to anything, Carried on as selfemplyed to this day and get the odd freelance work hourly but nothing else. This year doesn't count. Only liable for JSA? Can I still work and get JSA? I feel like I'm regarded a useless part of society, therefore not important enough to help but I've paid my tax every year. Why can't furlough be pushed back?
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