At the end of March 2020, the UK government announced support to help freelancers and self-employed people suffering loss of earnings as a result of coronavirus COVID-19. Called the Self-Employed Income Support Scheme (SEISS), the package means that self-employed and freelance workers will be able to apply for a grant of up to 80% of their average monthly earnings.
It was a financial aid victory for freelancers and the self-employed, seeing them offered the same level of support as employed workers. But how are the country’s freelancers really coping?
The impact of COVID-19 on freelancers
The Creative Industries Federation surveyed 2,000 creative businesses and freelancers. They found that an alarming proportion are already experiencing a substantial impact on their work and income as a result of coronavirus.
A vast 61% of freelance workers said that due to the COVID-19 outbreak, their work had declined by 100%. That means more than half now have no projects, and therefore little to no income.
Viewing this scenario from the other side of the fence, more than half (51%) of organisations surveyed said they had had to terminate 100% of active freelance contracts.
Small businesses can no longer afford their freelancers
Of course, times are hard for businesses and organisations, as well as those who are self-employed or work in a freelance capacity. For many, pumping money into freelance contracts just isn’t an option when most are running emergency cost-cutting exercises to fend against the challenges that lay ahead.
The Creative Industries Federation research revealed that so far during 2020, 40% of creative businesses predict their annual turnover will decrease by more than 75% as a result of the coronavirus pandemic.
More than a quarter are already reporting “considerable” cash flow issues, and a concerning 32% say that their existing reserves will only last them somewhere between 4-12 weeks.
Find help for freelancers hit by COVID-19 coronavirus
The gig economy is going to be hit hard by the coronavirus crisis but there are some options which might help.
Accept help from HMRC – HM Revenue & Customs have set up a phone line to help freelance and self-employed workers with issues relating to coronavirus. The number you need to call is 0800 024 1222, and opening hours are Monday-Friday, 8am-4pm.
If you own your property, speak to a mortgage adviser about taking a three month mortgage holiday. It could help you conserve a considerable amount of your immediate outgoings.
If you rent your home, get in touch with your landlord or letting agent. New emergency laws have been passed to prevent evictions during this period, so that’s a start, but you never know, they may also offer you some relief with your rental payments on a temporary basis.
Evolve your offering, if you can. Expanding on what you can provide may help you get ahead of your competition, and engage new and existing audiences.
Speak up if you do have something new to offer – shout it from the rooftops! Use social media platforms like LinkedIn and Twitter to spread your services far and wide.
Find out more about our online accounting services, and how they can help self-employed freelance sole traders.
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