On 17th September 2020 the hon. Member for Brighton, Pavilion (Caroline Lucas) raised concerns in parliament about the provision of support for the self-employed and freelance workers. The focus of this article will be on PAYE freelancers.
In respect of PAYE freelancers the parliamentary debate highlighted how such individuals have fallen between both the government’s Coronavirus job retention scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) and been left unsupported.
Many freelancers have found themselves at the mercy of their employers who could have claimed furlough pay for them under the CJRS, but employers have refused to do so.
The fundamental hurdles facing PAYE freelancers stem from the SEISS eligibility criteria, which dictates that:
- trading profits have to be less than £50,000 last year;
- more than 50% of the individual’s income must have come from self-employment; and
- they must have lodged a tax return for 2019.
So where does that leave the PAYE freelancers who are taxed at source? Many PAYE freelancers do earn under the £50,000 cap but over 50% of their income comes from PAYE. They have duly submitted tax returns to HMRC who hold their backdated records but feel they are being prejudiced because they are being taxed at source. PAYE freelancers fall into a black hole of being on a PAYE payroll without benefitting from established employment rights coupled with having to file annual self-assessments for ‘genuine’ freelance work.
The SEISS has been extended, as announced by the chancellor on 24th September 2020 and will run from 1st November 2020 to 30th April 2021. The grant will be available to those who continue to work but face a decreased demand due to the pandemic. However, most importantly the eligibility criteria as detailed above has not changed despite the concerted lobbying efforts from Caroline Lucas and means no change as yet for the PAYE freelancers.