What the foreseeable future looks like for freelancers?

Almost every industry in UK has been affected and facing a rough patch due to the impact of COVID-19. As far as freelancers are concerned, result of COVID-19 has put substantial amount of impact on their work as well as income. As per the recent study made by creative industries federation on 2000 businesses, it has been found that there is 100% deduction in the work of 61% freelancers which mean that more than half of the freelancers are not having projects in their hands and bound to live on a little to no income, that is something critical. The main reason behind freelancer’s current situation is that more than 51% of their active contracts are terminated by the businesses.

In this article we cover:

1. Small businesses can no longer afford their freelancers
2. Support from UK government
3. Tips for freelancers to manage COVID-19

Small businesses can no longer afford their freelancers

This time is very crucial and hard for all businesses and organisations as there is a steep decline in their revenue due to the impact of COVID-19. Businesses & organisations are not finding this time to be right for pumping money into freelancing projects as most of them are involved in emergency cost cutting exercises inorder to fight current as well as future challenges.

As per the recent study made by creative industries federation research in 2020, 40% of the businesses predicted that there will be a steep decline of more than 70% in their annual turnover due to the impact of COVID-19. Many businesses reported that are already facing cash flow issues from more than a quarter and 32% of them said that their existing reserves will only last between 4-12 weeks.

Freelancers are facing economic pressures and looking for new projects but as you know that companies are also facing many economic issues due to the impact of COVID-19, they are also not in a position to pay freelancers for any new projects as well as cancelling some of their existing projects too. Hence, this period is very problematic for both – businesses & freelancers.

After taking the current study into consideration, freelancers future position depends upon two factors

• A. Where you on your freelancing journey?
• B. Which industry you belongs to?

Also See: Coronavirus Large Business Interruption Loan Scheme (CLBILS)

Support from UK government

UK government announced “Self-employment income support scheme” in the end of March 2020 to support those self-employed & freelancers who are adversely affected by COVID-19 and suffered a loss in their earnings. As per this scheme, freelancers and self-employed persons are entitled to apply for grant up to 80% of their average monthly earnings.

It’s good to see that freelancers are provided financial aid same as employed workers but the question is that whether this financial aid can really change their economic position or not?

Also See: Bounce Back Loan Scheme (BBLS) For Small Businesses

Tips for freelancers to manage COVID-19

There is no doubt that this freelancing industry is adversely affected by COVID-19 but there are still some options remaining that a freelancer can opt for

• A. Take help from HMRC – HMRC announced a helpline for freelancers & self-employed workers who are adversely affected or want help in any issue related to coronavirus from HMRC. Call HMRC on 0800 024 1222 from Monday to Friday (8 AM – 4PM).
• B. In case you owned a property, kindly get in touch with the mortgage adviser to apply for 3 months mortgage holiday. It can save much of your outgoing amount and also help you in coping up with the current situation.
• C. In case you are living in a rented house, contact your landlord or letting agent and try to reduce your rental payments on temporary basis or you can also take the help of the new emergency laws passed by the government to prevent evictions during COVID-19.
• D. In case you are having something new to offer to individuals or to the businesses, use media platforms such as Twitter, LinkedIn in order to publicise your services far and wide.
• E. Tell about your services to new audiences and engage both new and existing audiences with you in order to get ahead of your competitors.

In case you are a freelancer and want more tips from DNS to fight COVID-19, kindly call us on 03330886686 or you can also e-mail us at enquiry@dnsaccountants.co.uk

Also See: Apply For The Coronavirus Future Fund

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