Can I Freelance Whilst On Furlough? - More Than Accountants

Can I Freelance Whilst On Furlough?

The good news is that you can work for other people even if you’re on furlough. This could be a whole different career, freelancing work, or a contract with no set hours.

During the COVID-19 crisis, several firms found themselves in a precarious situation. Many employees have been laid off or furloughed as a result of the weakening economy, imposed limitations, and lost revenue.

Many workers are being paid a percentage of their previous compensation, and some are seeking for methods to supplement their income.

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Employment rules for furloughs

Furloughing workers is motivated by the fact that many businesses have no work for their staff. An employer can grant employees temporary leave rather than making them redundant.

You won’t be able to work or supply services for your existing employer if you’re furloughed. However, if necessary, you will be able to participate in training.

Self-employment and freelancing regulations

While the government grant permits you to freelance while furloughed, check to see if your existing contract allows you to do so.

No-compete clauses may be included in employment contracts by some employers, preventing you from doing identical work for others.

Freelance Taxes

You can earn less than £1,000 from self-employed income in a tax year without having to register for Self Assessment or pay tax on it thanks to the trade allowance. If you only perform freelance work on the side, this is quite useful.

If you make more than £1,000, you’ll have to register with HMRC and file a Self Assessment tax return.

Setting up as a self-employed person is simple and may be completed in a matter of minutes online. But that isn’t all there is to it. You’ll need to keep meticulous records of all your earnings and expenses in order to declare them to HMRC when filing your Self Assessment tax return.

If you’re unsure about anything, speak with an online accountants for small business UK.

Returning to work

In these times of uncertainty and volatility, it may be prudent to explore your future employment options in case you are unexpectedly laid off from your current position. Even if you receive ample notice or warning, it is evident that your employer will want you back to work as soon as possible. As a result, if you have already secured another employment or pledged to deliver your skills to another client, things may get difficult or unpleasant. This is where the concept of freelancing comes into play.

The best part about freelancing while on furlough is that it allows you to be quite flexible. To supplement your missed income, you can freelance from the comfort of your own home or just look for new work during your leave of absence. However, freelancing must be managed properly, or it will become a nightmare once you return to your regular job. As a result, rather than freelancing while still managing your full-time job, you might want to explore picking up some other jobs while on furlough. You can also do some tasks in your spare time to provide you with the extra stability that comes with having a second source of income. At the end of the day, it’s a great benefit for you, as it can help you not only make up for missed revenue, but also explore other interests and learn new abilities. The only thing you need to watch out for is freelancing on company time.

Conclusion

During the ongoing pandemic, freelancing is a terrific approach to secure your present and future. However, you must thoroughly review your employee contract before making a decision to ensure that you do not find yourself in a legal bind.

FURTHER READING: What Does the Term “Liability” Mean in Accounting

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