Concerns around coronavirus are teetering on the edge of hysteria. Fuelled by constant media coverage, premature panic-buying, and the threat of the biggest fiscal migraine since the 2008 recession, it’s easy to see why. As many employers are seriously considering remote working options for their staff, the self-employed are left to decide for themselves how they’ll approach the COVID-19 pandemic.

We've put together some practical tips on how to prepare for potential self-isolation for the self-employed, and how you can maintain the best relationship possible with your clients as the coronavirus situation develops.

Budget 2020 confirms coronavirus financial support for self-employed

Straight out the door, the Chancellor of the Exchequer acknowledged that coronavirus would have a ‘significant’ but ‘temporary’ impact on the economy. He warned that up to a fifth of the working population may be off sick at any one time, meaning that the UK’s productivity capacity would inevitably fall, as would consumer spending.

As part of a £30bn plan to bolster the nation against COVID-19, millions of contractors, freelancers, and gig-economy workers will be given help through a £500m boost to the benefits system, including a temporary halt to the minimum floor in universal credit and quicker payments for employment and support allowance (ESA) claimants.

The government will also refund smaller businesses – meaning anyone with less than 250 employees - for any sick pay for up to 14 days, and banks will offer loans of up to £1.2m to support small businesses through any fiscal headaches.

Other key measures announced to help the self-employed through the pandemic include:

  • ‘New style’ Employment and Support Allowance will be available for those directly affected by coronavirus from the first day of sickness, rather than the eighth;
  • Workers will be able to claim Universal Credit and advance payments when self-isolating without having to attend a jobcentre in person;
  • A deferral period called ‘Time to Pay’ will be introduced to any tax debt owed to HMRC, and will allow anyone in financial distress to negotiate a more lenient timescale in which to pay it back;
  • HMRC has set up a dedicated coronavirus helpline for those in need and will waive late penalties and interest where a business has trouble contracting HMRC or paying taxes because of the virus. 

IPSE is supporting contractors through coronavirus

The Association of Independent Professionals and the Self-Employed (IPSE) published an article this week detailing action that they’d taken on behalf of UK-based contractors, which included requesting better guidance from the government tailored for the self-employed. Their statement read as follows:

“IPSE wrote a letter (available to view here) to the Secretary of State for Health, Matt Hancock, and the Secretary of State for Work & Pensions, Therese Coffey, on 27th February on the issue and raised two principal concerns. First, despite the publication of the government’s advice for employers and businesses there has been no such dedicated guidance for freelancers or clients. Second, we raised the problem that while employees can be guaranteed sick pay when they self-isolate or if their office closes, freelancers and the self-employed do not have the same security and risk losing income.”

While this action is greatly welcomed, there are ways that contractors can prepare right now. Besides making sure you read authoritative sources rather than click-bait headlines and keeping a level head when it comes to planning, the most important thing you can do is maintain good communication with your clients.

Collaborate with your clients about coronavirus

First and foremost, ask your clients about their plans for working around coronavirus. If you currently provide your services from their offices due to any security measures they have in place, discuss how you can get set up for remote working. Genuine contractors should already be able to choose when they work and where they work from, but it’s good practice to make sure you and your client are on the same page - particularly in the present climate.

If you’re currently being paid by the hour or day, discuss shifting to a scope based or output-based contract; be clear on what you’re delivering rather than when and where you’ll be to deliver it. This will not only help your IR35 employment status but ensures you and your client are working together as cohesively as possible.

Lastly, if you're not able to work due to illness but have deadlines to meet, have a frank discussion with your clients about potential extensions. You could also arrange a substitute that can provide the contracted services on your behalf, but keep in mind that this person should be paid through your limited company rather than by the client directly. If you have business insurance, read your policies and understand what cover and protection you have in place if you’re not able to work. If you have nothing in place, professional indemnity insurance is a good place to start.

Larsen Howie can also help you prepare for the IR35 reform. We offer a range of contract and working practices reviews – you can find out which option would be best for you here. We also offer IR35 investigation insurance with representation should you go to tribunal, as well as training and consultation for businesses that wish to continue working with their invaluable contractor workforce.

For more information on how Professional Indemnity insurance can help your business, feel free to take a look around our Knowledge Hub. Alternatively, you can call us on 01163 800 400 or email us.

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