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 from the Self-Employment Income Support Scheme (SEISS);
- 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;
- It 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.
The bad news includes:
- No money will arrive before June.
- If you have not filed a self-employed tax return for the tax years 2018 to 2019 you get no grant - though if you missed the 31 January deadline it presently seems you have until 23 April to make a late filing.
- If you only have a few months' self-employment on your 2018/19 return, this income will be counted as your profit for the whole year.
- 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 (PAYE) and 49 per cent from pure freelancing, your will get no SEISS grant.
- When this is all over any grants you receive will be counted as taxable income.
In these calculations it seems that "profit" refers to the box on your income tax return that calculates your turnover minus allowable expenses.
1 May 2020
The Treasury has issued a Direction to HMRC setting out the rules for SEISS payments. A person who receives payment must:
- carry on a trade the business of which has been adversely affected by reason of circumstances arising as a result of coronavirus or coronavirus disease,
- have delivered a tax return for a relevant tax year on or before 23 April 2020,
- have carried on a trade in the tax years 2018-19 and 2019-20, and
- intend to continue to carry on atrade in the tax year 2020-21...
The condition on the trades that are entitled appears to be new,s but journalism would appear to be such a trade. Payments are independent of actual loss.
6 May 2020
A member writes that it looks as though "the Treasury is speeding up the timetable for claims and payments to those who qualify for the self-employment bailout [SEISS]. There is an eligibility checker now on the gov.uk website: if put in your 10-digit tax reference number and your NI number it gives you a date from which you can apply... And according to the latest update from Martin Lewis at Money Saving Expert, the cash will be paid in to bank accounts six working days from the date of application. Anyone using the eligibility checker will be assigned an application date between 13 May and 18 May, so everyone eligible ought to be able to get the money by the end of the month."
ALSO note that you can apply for both SEISS and Universal Credit. If you get SEISS it will be counted as income and you UC payments will be reduced; but it will often be worth joining the queue for both.
AND FURTHER this from moneysavingexpert.com: "Government small business bounce back loans have been launched and can be used to support your income". They could be useful to those with no other support - such as newly self-employed people and limited company directors. Since Monday 4 May, the new 100 per cent state-backed bounce back loans, for amounts between £2000 and £50,000, have been available. They're interest- and payment-free in the first year - so pay it off then and it's no cost, and at a very low 2.5 per cent annual interest after that - they're set up to repay over six years." A dozen banks had announced plans to offer these loans by 16:00 on Wednesday 6 May - see the moneysavingexpert page for an updated list.
The Freelance would under normal circumstances advise getting professional advice before taking out a loan.
18 May 2020
The BBC reports people who were receiving Working Tax Credit having it cancelled when they started an application for Universal Credit. They did not even complete that application, because they were concerned that their savings would make them ineligible. So if you receive Working Tax Credit or any other "legacy" benefit - take great care.
The UK government's earlier guarantees of wages and salaries for employees but nothing 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 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 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.
17 April 2020
The NUJ and sister unions pressed for the rules on savings affecting eligibility for Universal Credit to be relaxed for the duration. Instead, we get an accounting clarification.
To quote moneysavingexpert.com:
Self-employed and have savings put aside to pay tax? It needn't decrease what you get"Saving around a third of your profits to pay tax is normally sensible. But, if you're now looking at claiming Universal Credit, and you have that amount in a personal account, you might think you're not eligible. We've checked with Department for Work & Pensions, who confirmed that while they'd expect business savings to be in a business account, nevertheless 'if someone has money in their personal account to be used for business purposes, it won't be counted towards their capital.'
If your household has more than £6000 of savings that are NOT provably earmarked for such purposes, your UC entitlement starts to reduce. While you have £16,000, you get nothing. It would seem that, if you need to claim Universal Credit, you should simply declare the savings which are "truly personal".
24 April 2020
On 23 April welfare delivery minister Will Quince told Parliament's work and pensions Select Committee that the Universal Credit system "will not change" for the pandemic. It would be too expensive to change the system to convert loans to those awaiting proper payments into grants. And the Committee heard that self-employed people with savings of £16,000 would be eligible to claim for universal credit if they could show a portion of that money had been kept aside for paying future tax bills - where HMRC's comments reported above imply no threshhold. The Freelance is keeping an eye out to discover whether the Committee was being informed of yet more amendments to the regulations.
If you do regular shifts
The government has guaranteed 80 per cent of salaries for employees. The BBC has shown best practice by promising to include those on fixed-term contracts and freelances paid PAYE in this scheme. Other companies have not. At the time of writing, by default freelances paid PAYE are excluded from SEISS. The NUJ has pointed out to Parliament's Treasury Committee that this is one of the major holes in the scheme.
The NUJ's Freelance Office can offer advice on contractual matters and cancelled work: contact details are here. It may be worth trying to claim Statutory Sick Pay at £94.25 a week, backdatable to 13 March.
6 April 2020
The government today announced that companies can get support to "furlough" all workers who are paid via PAYE, but who are not necessarily employees in employment law. This applies if you were on the payroll on 28 February On 15 April this deadline was extended to 19 March. There is also provision for company office holders and for those who work through agencies. See here for the full government advice.
17 April 2020
Furlough is - as expected - formally extended to the end of June.
12 May 2020
Furlough is again extended to the end of October. At some unspecified time we will get details of "flexibility" measures which will, from an unspecified date in August, allow for furloughed workers to work part-time and require employers to pay an unspecified share of the 80 per cent of previous PAYE earnings that continues to be guaranteed to those workers. Clearly, when employers get this announcement they will fire up their spreadsheets and make decisions on costs...
If you have a limited company
Financial journalist 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 director can expend effort for the company, for example to claim the support for the employee's pay based on their PAYE earnings. Earnings that they took as dividends (at a lower tax rate) do not count. Treasury guidance issued on 15 April specifies that you (director) must agree in writing with you (employee) that you are on furlough.
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 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, we will add links to this online at www.londonfreelance.org/fl/2004help.html - and see here for support for members who live outside the UK.
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.
10 April 2020
The Authors' Licensing and Collecting Society (ALCS) is asking members to write to their MPs about remaining gaps in government support. It identifies these as including:
- People who are part-employed and self-employed cannot qualify for both the Job Retention Scheme (JRS) and SEISS, meaning that their normal income is not fairly reflected.
- Self-employed workers with ongoing expenses, such as workspace and equipment rent, are disadvantaged by SEISS - which focuses on taxable profits. It would be simpler and fairer, given that there is a £2,500 upper limit, to take gross income not profits into account.
- Recently self-employed people will also be at a disadvantage, as their income may not be properly reflected in their 2018-19 tax return.
There are also question about the fairness of measures for those who have limited companies - see above.
See the outline letter on the ALCS site.