What help is available?
After criticism that the government was overlooking self-employed people in its support packages, chancellor Rishi Sunak announced that they would provide grants to those who derive most of their income from self-employment. The Self-Employed Income Support Scheme (SEISS) will cover up to 80% of self-employed people's profits, in line with provisions for full-time employees. Those who are eligible will be contacted by the government and allocated a slot in which they can apply for support. The amount given will be based on three-years worth of tax returns, however, those who have not been freelancers for three years will be given an average of their typical earnings.
Who is eligible?
As long as you have filed a tax return for the April 2018-19 tax year, derive more than 50% of your income from self-employment, and don't earn over £50,000 a year, you're eligible for the scheme. But as Matt Dowling, founder of The Freelancer Club explains, the current conditions leave a large amount of freelancers and self-employed people without support. He says: “Up to 2 million people are excluded from SEISS entirely. Its clauses are endlessly unforgiving. Amongst those ineligible are those who became self-employed too recently or took maternity leave; those who earn too little; those who earn too much, despite being sole breadwinners providing for families; those who invested in their business at the expense of personal profit; and those who maintained part-time employment to ease the transition into self-employment."
The Freelancer Club is urging the government to extend its support. Dowling explains: "On top of this, many [freelancers] are also ineligible for Universal Credit or Small Business Grants. These are not cracks, but craters, and freelancers are falling through them fast. The government must address our plea for support to be extended. The alternative will risk ruin for hundreds of thousands of vulnerable, hard working people."
Those who had missed the Jan. 31 2020 deadline to file their tax return for 2018-19 were given an extension until April 23 to do so. If you didn't filed your tax return by then, you won't be eligible for support. If you are unsure whether or not you're eligible, HMRC has created a tool you can use to check.
When will the money be paid?
Despite being announced in March, the government grants aren't actually going to be paid into bank accounts until late May or June. While a late payment is far from an unfamiliar experience for many freelancers, it doesn’t make it any more manageable, especially during a time when many people’s income sources are drying up or vanishing entirely.
As Dowling explains: “Freelancers up and down the country have had their incomes totally decimated by the crisis. There is no telling when work will resume and the pressure is only building. The reality of freelancing often means living from pay cheque to pay cheque, chasing unpaid invoices from months back. It’s delusional to think that these people — many London renters — are in any position to hold out until June, when support will finally be available for SEISS applications. Bills will not wait for HMRC to make a start on processing paperwork. Accessing financial aid is a question of putting food on the table for freelancers and their families right now. The government must expedite support."
What if I can’t wait till June?
One option for freelancers is to sign up for Universal Credit, but wait times are lengthy due to the significant increase in demand and, as Dowling explained, some freelancers won't be eligible for UC. These aren’t the only issues, either. Although Chancellor Sunak announced an increase to UC, the most that successful claimants can hope to receive is £410 a month. This is still well below the average amount a self-employed person earns in a month (£1,025), per the Trades Union Congress. The amount of UC received is also determined by age, which makes the potential amount young people will receive even lower.
If you wish to sign up for UC, you can do so by visiting the website. If you're not eligible for UC, the government has launched a tool that small businesses can use find out what support is available to them. Those based in Scotland have access to a government hardship fund for new freelancers who aren't eligible for SEISS.
Are there any non-government options?
One option is to get in touch with the union for your industry. Many will offer hardship funds, although these are often only accessible to members, so you may have to pay a joining and/or membership fee. You can find your industry’s union here.
There are also a number of organisations offering grants to freelancers and the self-employed to help support them during this time. For example, the Arts Council is offering grants for those working in cultural industries. For further information on grants for businesses and individuals affected by coronavirus visit Grants Online.