This is an archive of the first version of this article: the current version is here
We win some help
AFTER INTENSE lobbying by the NUJ and its sister unions, the UK government announced measures to help freelances through the covid-19 crisis on 26 March.
As the Freelance currently understands these, the good news is that:
- Established freelances will be able to apply for a grant to compensate for loss of earnings;
- The amount can be 80 per cent of the average "profit" you declared to Her Majesty's Revenue and Customs (HMRC) over the past three years;
- The maximum anyone can claim is £2500 a month;
- The grant will be backdated to March (we need to confirm when in March);
- HMRC will contact you to invite you to apply; and
- Under separate measures, you can apply to defer income tax, rent or mortgage payments: see the links below.
The bad news includes:
- No money will arrive before June.
- People who moved into freelancing very recently get nothing under this scheme. If you have not filed a self-employed tax return for the tax years 2018 to 2019 you definitely get no grant - though if you missed the 31 January deadline it seems you have until 23 April to make a late filing. (We need to confirm the exact deadline.)
- As financial journalist Martin Lewis notes: "if you only have a few months' self-employment on your 2018/19 return, this will be counted as your total profit for the year -s the government won't pro-rata it based on your monthly profits".
- Grants will be available only to people who got more than half their income from freelancing - so if 51 per cent of your income came from shifts paid Pay As You Earn and 49 per cent from pure freelancing, your income will be less than half what it was.
- When this is all over any grants you receive will be counted as taxable income.
- No grant at all will be paid to anyone with an average trading "profit" over £50,000.
In these calculations it seems that "profit" refers to the box on your income tax return that calculates your turnover minus allowable expenses.
The UK government's earlier announcement of guarantees of wages and salaries but not for freelances was met with outrage.
NUJ General Secretary Michelle Stanistreet writes: "The NUJ, with the TUC and sister unions, swung into action. It was unthinkable that the government was not going to come to the aid of 5 million self-employed workers, including many in the media, just because it was difficult. This crisis has put the precarious lives of so many working people into sharp focus and responses to our Freelance Office have shown the stark reality of members whose work dried up virtually overnight. I joined a meeting with fellow trade unions and Treasury officials to thrash out the issues."
The NUJ is looking at the package in detail and will continue its conversations with government, alongside allied trade unions representing many freelances - particularly the actors' union Equity, the technicians' BECTU section of Prospect, and the Musicians' Union. These all ran effective public campaigns to help get this support.
Everyone left out by this measure will need to apply for Universal Credit. The rules for this have been relaxed - but there are massive backlogs in a system that the Freelance believes was designed in the first place to deter and delay claims.
The "monthly standard allowance" for Universal Credit (UC) is £317.82 for a single person over 25 and more if you have children, have a disability or "need help paying your rent". In response to coronavirus, the government is waiving the "minimum income floor" - the level of monthly earnings that UC simply assumes - from 6 April. The "floor" affected what self-employed were entitled to.
Only those who have illnesses or disabilities that affect their ability to work can get the old Employment and Support Allowance (ESA). This is £73.10 a week for the over-25s.
If you do regular shifts
The government has guaranteed 80 per cent of salaries for employees. The NUJ's Freelance Office can offer advice on contractual matters and cancelled work.
Given the framing of the rules for grants for self-employment, we need to confirm whether this guarantee applies to all earnings taxed Pay As You Earn, or just those with a full-fat contract of employment.
If you cannot do shifts because you are self-isolating, it may be worth claiming Statutory Sick Pay at £94.25 a week, backdatable to 13 March.
If you have a limited company
Martin Lewis has "had it absolutely confirmed by both the Treasury and HMRC that self-employed limited company directors can be furloughed as employees on their PAYE element, even if they're the sole employee. Technically they can't then work for the firm, but can continue to perform their statutory obligations as directors." So the human can expend effort for the company, for example to claim the support based on their PAYE earnings. Earnings that they took as dividends at a lower tax rate do not count.
Community support and more
Mutual aid networks are being set up at street or neighbourhood level to help with shopping, picking up prescriptions and dog walking. Operating by email, Facebook and WhatsApp, they will have the word "mutual aid" in their title. Look look out for flyers coming through your door or posted in shop windows locally.
As we add more information on further help available to NUJ members and, we hope, on suupport for members outside the UK, we will add links below.