How COVID will shape the future of work – and how freelancers will benefit
Earlier this month, the Association for Independent Professionals and the Self-Employed (IPSE), released some worrying statistics about the impact that COVID-19 has had on freelancers. They found that the average quarterly earnings of highly-skilled freelancers fell from £20,821 at the end of 2019 to just £15,709 in Q2 of 2020. That’s a decrease of 25% and the lowest level on record since IPSE started collecting this data back in 2014. They found that freelancers were still managing to achieve their day rates, but that the number of days they were working per quarter had fallen dramatically, making a huge impact on earnings.
However, there are reasons to remain hopeful – yes, even as we head into higher tier restrictions in some areas of the country. COVID-19 has had far-reaching impacts on the way that we work, especially in professional, management and technical occupations. While much has been made in the press of whether the pandemic means the end of physical office space (and the sandwich shops and overpriced coffee chains that go with that), we’re far more interested in how the changes might present new opportunities for freelancers.
Built-in flex: contract to expand
Unemployment rates are high at the moment and the job market is extremely competitive. But firms are still nervous about taking on new staff. A permanent employee presents a significant financial commitment to an organisation. Hiring means having to fund pay, sick pay, holiday pay, a pension, bonuses, maternity or paternity pay, and any other perks that come in the company’s package, as well as equipping an employee with a workspace, remote or otherwise. And it means committing to funding that position long-term. Yes, companies can put workers on probation or make redundancies, but every stage of this process, from recruitment onwards, is a significant investment. And some businesses are worried that they just don’t know enough about their short, medium, or long term situations to make these kinds of commitments right now.
That’s where freelancers come in. Hiring freelancers will allow companies to bring on board highly-skilled individuals for individual projects or for short-term contracts. It offers them built in flexibility to use their staffing budgets in the smartest way – to bring in expertise, skills and talent (that’s you!), without longer term commitment. Of course, as freelancers we know that once we’ve got a foot in the door, a job well done will often see us called back for more time and again. So, although a freelance gig comes without a commitment to more work, it often leads to a longer-term relationship. Businesses that harness the power of a flexible freelance workforce that they can scale up or down to adapt to changing market conditions are going to be stronger in weathering the COVID storm. Freelancers can use this to attract new clients – perhaps even those who’ve never used freelancers before.
Remote working: hire the best, wherever they are
A lot of the discussion on remote working has focused on how it has changed employees’ experience of the working day, affected productivity, and that looming spectre of vacant office space. What fewer people have noticed, however, is the additional opportunities that remote working presents to businesses, particularly in the recruitment process. Shifting to a partly- or fully-remote working set-up increases a company’s chance of being able to hire the very best people for their roles. And by this we mean, literally the best person in the world for that role, rather than “the best person that lives within commutable distance of the office”.
Again, this presents new opportunities for freelancers. Contracts that previously would have stipulated having to be on-site are now open to remote applicants. You can start to search for freelance gigs more widely – in other regions, in other countries, and even on other continents! There’s the added bonus to businesses that many freelancers are already skilled in remote working practices. We were all on Slack before it was cool. We’re used to cramming in Zoom calls between the school run and the weekly shop. We know the importance of clear, written communication in an asynchronous working environment. We’re experienced at managing ourselves and our workloads without a manager peering over our shoulder to check up on us.
Many businesses have been realising the savings that they can make by not having permanent physical office space. It’s much cheaper for them to provide a decent working from home set-up and virtual office for their employees than it is to rent, furnish, equip, clean, maintain, heat and power a physical workspace. Figures from the US suggest that, per employee, a remote office set up is about 10% of the cost of a physical office space. This is another reason why freelancers – who often use their own equipment – are an attractive proposition right now. If you’re a freelancer, your fee also needs to cover these costs if you’re working remotely. Remember, if you work from home all or some of the time you may also be able to claim the costs of running a home office back against your Self-Assessment tax return.
Before you set off into the brave new world of post-COVID employment, make sure you have your back covered with Dinghy freelancer insurance. Specially tailored for people working freelance, it offers professional indemnity, public liability and business equipment insurance all in one easy, flexible package charged by the second. Just like the companies with their new freelance workforces, you can scale up or down your cover depending on how business is going. Sign up now at getdinghy.com, so that you’re ready to spring into action when that next opportunity comes your way.
Everything you need to know about the SEISS extension as a freelancer
2020 has been tough for everyone, but freelancers have been especially hard-hit. At the start of lockdown, freelancers were being released from their contracts en-masse and offers of new work were scarcer than a 9-pack of loo roll and a bag of pasta. The furlough scheme offered support of up to 80% of wages for employees who could no longer go out to work. “Won’t somebody think of the freelancers?!” we wailed, and we were heard. Well, sort of. Along came the Self-Employment Income Support Scheme (SEISS). This blog gives the lowdown on the SEISS and its recent extension – so that freelancers know what government support in available to get them through the winter.
What is SEISS?
The government launched the SEISS scheme to help freelancers recover some of their income lost to COVID-19. If you can’t work, or your business has been affected by coronavirus and the national and local restrictions put in place, you may be eligible to claim for some of these lost earnings. The scheme so far has had three stages.
First SEISS grant: The scheme originally opened in mid-May, and covered businesses for the period up to 13th July. It covered lost earnings at 80% of trading profit, calculated based on 2018-19 tax returns. Claims for the first grant are now closed.
Second SEISS grant: The SEISS scheme was then renewed to cover July to October, covering 70% of lost earnings. Claims for this grant must be submitted by 19th October.
SEISS extension scheme: The recent extension was announced in October. This will provide up to two further grants, covering the next six months.
The first grant will cover the period from 1 Nov 2020 – 31 Jan 2021. This will be:
- A taxable grant
- Up to 20% of average monthly trading profits
- Paid as one single instalment covering 3 months
- Capped at £1,875 in total.
HMRC say that this level of support is roughly equivalent to that being offered to employees through the Coronavirus Job Retention (furlough) scheme. A second extension grant will cover the period from February until the end of April 2021. HMRC has yet to set the level of this grant and say it will be announced in due course.
The government has not yet announced any additional support for the self-employed living under conditions of higher local lockdown tiers. The situation with COVID-19 is changing all the time, so keep your eye on the HMRC website for the latest guidance and updates for the self-employed.
Is SEISS still available to freelancers?
The government says that most people who are self-employed will be eligible for these packages of support – that includes freelancers. However, all SEISS grants are subject to the following criteria and so unfortunately not every freelancer will be eligible. Indeed, research estimates there are up to 3 million UK taxpayers who fall outside the eligibility for government COVID schemes.
You are eligible if you:
- are self-employed or a member of a partnership
- you traded in the tax year 2018 to 2019 (and submitted your Self-Assessment tax return)
- you traded in the tax year 2019 to 2020
- you have and intend to continue trading in the year 2020 to 2021
- self-employment makes up at least 50% of your income
- your trading profits are less than £50,000.
The amount you will be paid is calculated based on the information you submitted in your 2018-2019 Self-Assessment. Even if you have not claimed the two previous SEISS grants, you are still entitled to claim from the new extension scheme if you are eligible and your business is affected by coronavirus.
You can’t claim if:
- you trade through a limited company or trust
- you became self-employed after 6th April 2019
- you work (or have worked) a mix of PAYE and self-employed jobs, with self-employment making up less than 50% of your income
- your trading profits are more than £50,000.
Income from other sources may affect your entitlement, and periods of PAYE employment can affect the average profits that the scheme calculates for you.
How do I access SEISS?
If you fit the criteria outlined above and your business continues to be affected by coronavirus, you can put in a claim to the extension scheme. The government has not yet released specific details of how to do this. However, it is expected to be similar to the previous rounds of grants. If you are registered as self-employed and HMRC think you may be eligible for SEISS they will email you telling you what date you can apply from. You apply online via a form on the HMRC website and once your claim has been assessed the money will be paid straight into your bank account.
You’ll need the following information to hand:
- Your Unique Taxpayer Reference (UTR) – you should have this from when you submitted your Self-Assessment
- Your National Insurance (NI) number
- Your Government Gateway ID and password – again these are used when you log in to your Self-Assessment account so hopefully you have these written down somewhere!
- Your bank account details
You have to make the claim yourself – unlike a tax return, an agent can’t do it on your behalf.
Is there any other government help I can benefit from as a freelancer?
HMRC has previously said that if you have any Self-Assessment payments on account due by 31 July 2020, you can defer these until January 2021. We don’t yet know whether this will be extended if the economy continues to be affected by coronavirus.
If you fall through the gaps of all of the current support schemes, or you are still struggling to get by, you may be eligible for additional support. Entitled To is a good resource for understanding any benefit payments that you may be eligible for. Universal Credit is a monthly payment to help with your living costs if you’re on a low income, are out of work, or can’t work. You can apply online through the government’s website. These support schemes are here to help, and you shouldn’t be afraid to claim them if you’re in need – we have to look after each other in these times! And of course it’s always worth getting advice from your accountant to ensure you are applying for the correct schemes.
That’s also where we come in: looking after each other. Dinghy is committed to making insurance for freelancers and the self-employed fairer. So if you’ve got no work coming in at the moment, you can press pause on your cover. We never charge admin fees or interest on monthly payments. We’ll even help you chase unpaid invoices – it all helps, right? Log on or call 0116 830 5654 for your quote today.
How to lead a greener life
Whether we intended it or not, lockdown made us all greener. During early April, UK emissions were down 31% on the same period in 2019. The country also achieved a record-breaking coal free period of 67 days, 22 hours and 55 minutes between April and June. There is hope that the rise of remote working could lead to a greener way of living – however, climate scientists have issued a stark warning that the rebound in emissions was surprisingly rapid as lockdown eased.
How can freelancers play their part in a greener world? This blog gives our top tips for treading lightly.
Ditch the car
The home office may be king for now, but if you do need to get out and about, see if you can go under people power. Walking, running and cycling have all seen a huge boost. Sales of bicycles in the UK increased 63% during lockdown. Activity-tracking app Strava saw a tripling of users and the government has announced a £2billion package of measures to encourage walking and cycling to continue. Councils are responding with new cycling infrastructure in towns and cities across the UK, meaning taking off on two wheels should be safer, faster and easier than ever before. So save on parking, petrol and emissions by ditching the car for short journeys.
Reduce your food waste (or even grow your own)
Early lockdown changed our food-shopping habits. After the panic-buying (let’s not talk about that, it was a bit embarrassing for everyone), came a period where we were only to go out for essentials. Many of us reduced our shopping trips to once a week or less. This meant we had to plan meals carefully. But according to eco-experts, this is also a really good tip for reducing food waste. It means you’re not tempted to buy things that you don’t really need just because they’re on offer. It means that everything you buy is bought with purpose, reducing the amount you have rotting in the fridge at the end of the week. It’ll save your wallet as well as the planet.
Gardening was another success story of lockdown as people took to social media proving that even the tiniest outside spaces can bear fruit. Now is the best time to plant overwintering vegetables like onions, turnips and spinach. Even if you don’t have a garden, herbs like basil, thyme, rosemary, parsley and mint all grow well indoors.
We’ve all got very good at the recycling part of ‘reduce, reuse, recycle’, but generally, we’re not so good at the other bits. Before you automatically throw something in the recycling bin, ask yourself, could this be useful for something else? Here are some ideas for creative ways to reuse:
- Old clothes that are too worn or bobbled to go to the charity shop can be cut up into dusters or dishcloths
- Clothes that are ripped or stained can be made into new things – face masks, perhaps?
- Jars, egg boxes and yoghurt pots are good for planting seedlings
- Wrapping paper and magazines can be good additions to your kids’ art supplies
Consider replacing disposable items with reusable versions. Face masks are here to stay for the foreseeable future, so if you’re still making your way through packs of the blue disposable ones, why not invest in a washable, reusable one? Switch to a facecloth instead of disposable cotton pads and consider a safety razor instead of plastic disposable heads or razors which will take decades to degrade.
The postman’s arrival with another set of parcels full of craft supplies, homeschool materials or some new loungewear was one of the precious joys of lockdown – but do we really need all this stuff? Being sustainable isn’t just about buying from environmentally conscious retailers, it’s about considering whether we really need that new item at all. So before you click ‘add to basket’, just take a moment to consider whether what you’re buying is worth the environmental impact.
Heating and electricity – use only what you need
If we’re all in for a winter of working from home, our energy consumption is sure to go up. But simple measures like turning off lights and appliances when you’re not in the room and hanging out the washing on dry, windy days, can have a big impact. There are also many new technologies that can help you reduce the amount of energy your home uses. Use thermostatic radiator valves to heat only the room that you’re working in during the daytime – there’s no need for your bedroom to be 21 degrees if you’re working at the kitchen table. A smart meter will tell you in alarming detail exactly how much electricity you’re using – and how much each minute of that tumble dryer spin is costing you!
Speaking of only using what you need…
Dinghy insurance for freelancers offers full flexibility. You can turn your cover up or down, just like your thermostat, and if your client base is buzzing, you can make sure you’ve got the insurance to match. Alternatively, if you need to pop it on deep freeze for the winter, we can sort that out too. You can manage your policy online anytime of the day or night. You don’t even need to get out from under that snuggly blanket. Good energy saving right there! Get your quote now at: getdinghy.com/deck/quote/
How to pick up new freelance clients despite COVID
Lockdown has been, and continues to be, hard on freelancers. Empty inboxes, cancelled gigs and being ghosted by clients were as much a part of the pandemic experience as binge-watching Tiger King and family pub-quizzes on Zoom. But with an uncertain economic climate and a full return to “business as usual” looking still some way off, many companies are looking towards freelancers to get them back off the ground. Taking on a freelancer is less of a risk than a new hire, and many freelancers’ skills make them uniquely suited to this brave new world of remote working and adaptable business.
In this blog, we offer our top tips for building up a solid client base that will keep you busy despite COVID.
Network – but take it online
In-person events are still few and far between, but opportunities are opening up online. Online seminars, workshops, and conferences may not be quite like the real thing, but still offer great networking opportunities if you ask a clever question, get talking to someone in the chat section or share your expertise as a virtual speaker. Plus there’s social media – a great place to look up opportunities, see who’s taking pitches, and to promote your services.
Reach out to old clients
If you had people that you were doing work for before lockdown, it may be worth a quick reach out by email or phone just to let them know that you’re available again and good to pick up where you left off if they need a helping hand. Chances are they’ll be delighted to share the workload with someone who already knows the business and doesn’t need bringing up to speed.
But we wouldn’t stop there – in fact, we’d say, go as far back in your little black book as you dare! You never know how previous clients’ circumstances will have changed during the COVID crisis and your email might hit their inbox just at the right time.
Reach out to peers that work in a different profession
Ant and Dec. Macaroni and cheese. Jedward. Some of the best things come in twos – and it’s the same with freelance hires. Teaming up with a pal with a different skillset can offer opportunities for client cross-selling. If you’re a copywriter, perhaps you could link up with a graphic designer and offer a full ad team? If you’re a UX expert, team up with a programmer and offer a complete website build and code. If you’re an influencer or stylist, team up with a photographer and create the portfolio of dreams. Clients love this because it saves them the work of looking for two hires. This is especially true if one of you has worked with them before – they’ll know your work is of high standard and trust that you’d only team up with someone equally awesome. You’ll each gain access to the other’s networks and could both find work that would otherwise have been totally off your radar.
Make sure you have a good contract ready to go
Impress the client and snap that business up quickly by having a contract set up and ready to go, containing all your key terms and conditions. Make sure it includes crucial information such as: your invoicing and payment terms (including bank account details); cancellation terms and kill fee; and ownership and copyright terms. A contract protects both you and your client by setting out the expectations and responsibilities of both parties right from the outset. You may want to include a section that you amend for the specifics of each assignment, including pricing and rates, deadlines and agreed brief. If you are creating a new contract or altering the terms of an old one, we recommend that you get it checked over by a solicitor specialising in contract law before you send it out to any clients, just to be on the safe side.
Make sure you have business insurance all set up
As a freelancer, assuring the client that you have business insurance in place shows that you’re a responsible, experienced professional, which in these competitive times could give you the edge. Being able to reassure your client that you have coverage that will protect you both if things go wrong takes a lot of stress and risk out of the transaction – with freelance insurance, you’re a safe bet.
Dinghy insurance is tailored to the needs of freelancers working in uncertain times. You can set up your cover, amend your requirements and make a claim all online, all the time. You’ll get professional indemnity cover and public liability cover as standard, and we’ll replace any lost, stolen or damaged business equipment within 24 hours or transfer you cash. Our freelancer assist service can also help you chase unpaid invoices (because that cash really would be handy right now, wouldn’t it?) and, because no one knows what’s around the corner, Dinghy’s unique benefits include being able to turn your cover on and off as you need it – as flexible as freelance life itself.
Get a quote today.