Sole Trader freelancers: pathways to support
Last Updated on 7 July 2021
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 – How long have you been a sole trader?
If you are registered as a sole trader, the government calls you ‘self-employed’.
The scheme that’s designed to support you is called the Self-employed Income Support Scheme (SEISS).
Read my blog about this scheme here >
The scheme works when the government has received a tax return from you for the tax years up to and including 2019/20. The deadline for submitting the return for 2019/20 was 31 January 2021.
Because the scheme is worked out on average profits over recent tax returns (or the last one if you started trading in 2019-20), there is a calculation you can do to see how much you might expect to get.
Check our online sole trader profit indicator >
If you set up as a sole trader after 6 April 2020, this scheme doesn’t work for you.
It might not bring you much support even if you were a sole trader in 2019/20 but your profits were small.
Update July 2021: If you live in Scotland or Wales, you may be eligible for a freelancer hardship grant through local schemes, but most of these are now winding down.
See the links on our Support page >
Check out videos about government coronavirus support on the HMRC YouTube channel:
Keep now, pay later
Sole traders are officially a kind of business in the UK, so some of the other business support measures have been available, most useful ‘bounce back loans’. Applications for these are now closed.
Read my blog on the coronavirus business loan schemes >
Martin Lewis of Money Saving Expert has a very good explanation of how the scheme has worked for sole traders and limited company directors.
3 – Check your eligibility for benefits
Benefits may be available to you even if you’re getting a very low income from the Self-employed Income Support Scheme.
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
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.
[Good news update 15 April 2020: Martin Lewis (the Money Saving Expert chap) reports a written confirmation from DWP that they will NOT count money saved for future sole trader tax bills as ‘savings’. This is a welcome tweak.]
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 £595-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
If you don’t get enough from the Self-employed Income Support Scheme, or from benefits, 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
