PAYE Freelancers: pathways to support
Last Updated on 6 November 2020
This page has been updated following the Chancellor’s announcements on 5 November 2020.
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.
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.
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 working for an employer by 23 September 2020 AND did the employer submit an RTI payroll report to HMRC by 30 October 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, 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 29 MAY 2020: Employers were 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 at minimal cost 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.
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.
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.
Posted on 14 April 2020