Martin Lewis posted to Twitter on Friday night to explain the options available to the self-employed in the face of coronavirus. The money saving expert shared a detailed video guide covering as many scenarios as possible.
- Martin Lewis explains self-employed support – what you can get now
Discussing freelancers and agency workers, Martin said: “Lots of people have asked me ‘what about freelancers who earn via PAYE?’, ‘what about agency workers?’, ‘what about umbrella companies?’
“Well in those cases, most people, as far as I am aware, earn through the payroll – PAYE.
“That means you are not eligible for this scheme, but you are eligible for the employees’ furlough scheme, which is where the employee who does the payroll can go to the government and say ‘furlough this person. They won’t work’ and they will get 80 percent of their income up to £2500.
“Now in the employees scheme – again, not the self-employed scheme – that income is defined generally as what you earned in February.
“But I’m hearing that there is some wriggle room coming in the guidance that if you had a particularly bad February and got *juggles hands*, they can look at how February contrasted to your income over the previous 12 months, but that one is still being finessed at the moment.
“Now the problem is I know many agencies, and many umbrella workers and many freelancers are going ‘well who do I ask?’.
“Well if you’re a freelancer and worked for lots of people in February go to all of them, they could all furlough you based on that. If you worked for one firm, it’s who you worked for in February that counts.
“If you’re an agency worker or in an umbrella company, push that company, it can furlough you.
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“Just to explain the furlough…the key thing about the furloughing, which is the technical term for when you’re not working, is effectively what the state has done is create businesses as the new welfare state, the new social security.
“It has given them the freedom to furlough people. And it wants people to do that. They’re not cheating the system by doing that.
“This isn’t like normal times where they want to narrow the funnel of who gets benefits.
“They want to ensure as many people as possible have that income supported so the economy doesn’t collapse.
- Martin Lewis on what Self Employed Income Support is amid coronavirus
“So show them this video – tell them they can furlough you. Agencies, umbrella companies, if you’re paying people by PAYE, the guidance I’m getting – forget the official guidance – is if there’s a need to furlough them because people can’t work, you can furlough them.”
What does furlough mean?
Among the Chancellor’s plans is a huge bailout to cover the wages of millions of UK workers.
The Government has pledged to cover 80 percent of salaries up to £2,500 per month, with all employers able to apply to HMRC to pay the wages of people who are furloughed.
An employee furlough is when bosses require their staff to take unpaid leaves of absence. In other words, they’ll still technically be employed but won’t work or get paid.
The Gov.UK website states: “If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
“To qualify for this scheme, you should not undertake work for them while you are furloughed.
“This will allow your employer to claim a grant of up to 80 percent of your wage for all employment costs, up to a cap of £2,500 per month.
“You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.”
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