PAYE Freelancers: pathways to support

PAYE freelancer

If you’re worried about your finances and wondering what support may be available to you, this page suggests a number of steps to take.

Assess > estimate > investigate

Before investigating any form of support it’s important to first assess your current situation, then estimate for the next few months any income/cash from any source (including savings) and compare that to all anticipated costs.

This will help you quantify the level of support you might need before you go looking for it.

And check out our advice and guidance on our Free Stuff page.

1 – Employment status

If you are paid through a payroll system with tax and/or national insurance taken off by the employer, you are treated by the government as an employee.

This is true for people who might be described as ‘casual’ or ‘freelancer’ as well, as long as they are on the payroll. If you receive a payslip, this is you.

2 – Is your employer furloughing people?

Employers are allowed to take part in the Coronavirus Job Retention Scheme.

You can read my blog on this scheme here >

This is so that people can be kept on the payroll, but told to go home and not work. The aim is to make it easy to bring people back to the workplace after the lockdown is lifted.

If you are freelance the key eligibility criterion is:

  • were you on someone’s payroll AND did the employer submit an RTI payroll report to HMRC by 19 March 2020?

If so, you need to approach your employer and check if they are furloughing you. You both have to agree to this, but you, the employee, have no right of appeal if they refuse to furlough you.

If you have multiple employers and you were on multiple payrolls AND they each reported your pay by 19 March, check with all of them. You are allowed to be furloughed by every employer separately.

If so, what might you get?

An employer is allowed to reclaim from the government up to 80% of your average monthly pay, up to a cap of £2,500 per month. So it will cost the employer nothing to pay you 80% of your normal monthly pay for a minimum of three weeks.

UPDATE 12 May 2020: Employers can furlough for up to five months from 1 March to end of July 2020. From August 2020 there will be changes to the scheme, but the scheme has been extended to October 2020.

UPDATE 29 MAY 2020: Employers will be able to introduce flexible furloughing from July 2020. Eg, work 2 days and furlough 3 days.

Some employers will pay their staff more and take the hit themselves. You’d need to check with the employer.

What if they say no?

Try to find out why an employer is not furloughing you. It’s possible that they don’t realise it’s free to them.

It may be that they have a cash flow issue themselves. If so, you could offer to wait until they get paid before taking your government-backed salary.

3 – Check your eligibility for benefits

Benefits may be available to you even if you’re part of the furloughing scheme, particularly if your income on furlough is very low.

It’s worth using a benefits checking site to see what you might be eligible for. It’s like a dry run for applying to the DWP. You can also get advice from Citizens Advice.

turn2us.org.uk >

Citizens Advice >

Universal Credit

Universal Credit may work for you if you do not have support from elsewhere.

To be eligible your household needs to have less than £16K in accessible cash (savings, etc).

  • If you live on your own you are the household.
  • If you live as a couple, sharing bills, you are both the household.
  • If you live in a flat share, but not as a couple, you’re treated as if you live on your own.
How much will you get?

This is very hard to generalise about. If you are 25 or over, a basic amount may be £450-ish per month. For a couple it would be £550-ish per month. But UC can be substantially higher if you have children, and are paying rent or mortgage interest.

It’s paid monthly in arrears (fortnightly in Scotland), but you can get an advance within days if eligible for UC and in difficult financial circumstances.

View a video of a freelance floor manager describing what it was like to apply for Universal Credit >

4 – Check support from industry bodies

Not eligible for the job retention scheme or benefits? You are not alone. There are a number of charities who might be able to help you.

If you work in film or TV, the Film and TV Charity has set up some emergency funds.

Check out our support for freelancers page >

Go back to ‘Types of Freelancer’ page >

Image credit: Peggy und Marco Lachmann-Anke from Pixabay

Please note:

Although every effort has been made to provide accurate tips and information, David Thomas Media Ltd accepts no responsibility for any errors, omissions or out-of-date facts. Trainees are advised to seek up-to-date professional advice on all financial and tax matters before making decisions relating to these subjects. Nothing in our notes, courses, webinars, downloads or social media should be considered as financial advice.
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Posted on 14 April 2020

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