I’m Self-Employed, What Now? Coronavirus Money Questions, Answered

The coronavirus will change all of our lives in some way, that much is now clear. Just a few weeks into the pandemic taking hold in the UK, many of us are already feeling the effects financially, from cancelled jobs, weddings and much yearned-for trips to fears over redundancy, lack of savings and how the hell we are going to keep up with our bills.

Ahead, we asked Laura Whateley, author of Money: A User's Guide to answer some of the most common questions we're seeing among our Money Diaries Facebook Group community.

I've got a wedding/hen do/holiday coming up and I've got accommodation or flights booked. I don't know if we'll be able to go yet – what are my rights in asking for refunds?

The Foreign and Commonwealth Office (FCO) is advising against all non-essential foreign travel, until at least 16th April. FCO advice is one of the things that should trigger a legitimate reason for a payout on travel insurance cancellation cover. So if you were going overseas this spring for any reason, and had travel insurance, you should now be able to claim for 'consequential loss', like car hire or hotel rooms you booked.

You will also need to try and claim for any flight on insurance if it is not cancelled, though most airlines and travel agents have now cancelled flights and package holidays. They should therefore offer you a refund or the chance to rebook, regardless of whether you have insurance.

Rory Boland, editor of Which? Travel, says some are ignoring this and only offering credit vouchers or the chance to reschedule, but "many people may not be in a position to rebook or may be uneasy about accepting credit, as many holiday providers are facing uncertain futures. The law says you are entitled to a full refund, so don’t accept a voucher if you have any concerns."

What happens if you don’t have insurance? This is likely to be the case if you had UK accommodation booked to be a guest at a wedding or hen do, for example.

If a hotel cancels your booking, they *should* offer you a refund. If they don’t, there might not be much you can do. Contact them to discuss your options; Airbnb allows hosts to choose when they will allow refunds. Booking.com has agreed to offer refunds in some circumstances.

If you are having problems getting a refund and you paid using a credit card, you could make a claim under Section 75 of the Consumer Credit Act, where your bank is partly responsible for whatever you buy actually being delivered. You should be offered a refund if the booking was more than £100.

You can’t claim this, however, if you decide to cancel a trip yourself because a wedding is off, say, rather than it being cancelled because a hotel has shut its doors or the FCO has advised against travel to your destination. 

I work in the service industry and my job has been made redundant. What are my first steps?

Hopefully, more employers will keep café and bar staff on after the chancellor agreed an emergency wage support scheme, which has promised to cover 80% of salaries of those who can’t work at the moment, up to a maximum of £2,500 per month.

The scheme will be open in a few weeks, but the grants will be backdated to the beginning of March.

It is not yet clear whether there will be help for people on zero-hour contracts, though.

Do speak to your employer about whether you might be eligible for this. If not, at least confirm whether you are entitled to any redundancy payments.

If you have already lost your job, there has been an increase in universal credit and tax credit benefits of £1,000 a year to help, though unfortunately for many people this will offer very little in the way of financial security.

Start by finding out what benefits you may be entitled to at the website Turn2us.org.uk, which has a benefits calculator. The charity StepChange has an emergency funding page to signpost you to possible sources of help.

There is a £250 one-off emergency COVID-19 grant scheme payment available from the organisation Hospitalityaction.org.uk to help hospitality workers impacted by the coronavirus. Applicants must have savings of less than £1,000 per person, not including any income from state benefits.

We're worried about being able to pay our rent, what should we do?

Sit tight for a piece on renters' rights coming tomorrow on Refinery29 but until then, let's consider what will happen if your flatmates can't pay. If you have signed a joint tenancy agreement, that is, your tenancy agreement has other named tenants on it, then unfortunately you are all jointly liable for the rent.

If one of the people on the agreement doesn’t, or can’t, pay their rent, it’s up to everyone else on the agreement to cover the shortfall, although it's worth remembering that the government has put a hold on evictions for the next three months.

Now is the time to be open and honest with your flatmates and come up with a plan – not necessarily easy if you are already trying not to kill each other while working from home around the same kitchen table.

None of you can be evicted for the next three months, so you need to talk to your landlord and negotiate how to meet your rent as a group.

If your flatmate thinks that beyond three months they really will no longer be able to afford to live with you, then unfortunately it is your responsibility to find someone else to rent the room, and you will have to pay their share of the rent until a replacement arrives.

Sue Anderson of the debt charity StepChange says that if you or your flatmates are worried about rent, start by having a look at Shelter’s dedicated coronavirus housing advice page. "We know how worrying a time this is for people facing the economic fallout from the coronavirus crisis, we have seen unprecedented visits to our website in recent days. Help is out there, and we are working urgently with other charities, the government and other organisations to influence further improvements and support measures for people who need them."

For anyone worried about debt issues and coronavirus, StepChange also has a dedicated hub.

It's worth remembering, too, that there has also been an increase in the local housing allowance, which is the housing benefit that private renters can claim, to cover at least 30% of market rents in your area, but this won’t be enough for the many who have high rent costs.

My investments are dropping, should I take the money out now?

There’s a new 'adage' doing the rounds: Treat investments and your pension (which will be partly invested in the stock market) like your face, don’t touch!

Most of you are probably a fair way off retiring and hopefully if you have invested money in stocks and shares, you have done so heeding the advice that investing is for the long term and you don’t desperately need the cash right now, so you have time to sit this out for a bit longer.

The idea of investing long term (for at least five to 10 years) is that you can ride the rise and fall of the market; those who lost a huge amount of money in the 2008 financial crisis have since seen their money recover and grow. Of course, how stock markets performed in the past does not – despite what many experts might like you to believe – dictate what the future holds, and we are definitely in terrifying uncharted territory.

But if you can live without the money that you have invested for now, most wouldn’t advise you to sell all your investments purely because you have got cold feet.

Do think about whether you are diversified enough, however, i.e. ideally not all your money is banked on the fortunes of the restaurant sector.

Trying to work out when to buy or sell investments is really, really hard and very few people, even those who are paid zillions of pounds for their investment nous, manage it.

No one can guess what the next weeks, months or years hold – who really saw all this coming? But so the cliche goes: Time in the market is much better than timing the market.

"I'm self-employed and my work has dried up – what do I do now?"

Self-employed, freelance and zero-hour workers have been hardest hit so far, with no employee safety net to fall back on, and only measly support from the government. Now though, the chancellor has announced a new package to help.

The Self-Employed Income Support Scheme will pay 80% of the average profits over the past three years of self-employed people up to £2,500 a month. This is applicable to workers with average profits of £50k or less.

Those eligible will be able to apply directly via a form on the HMRC website and the grant, which will be taxable, will be paid directly into people's bank accounts. In order to be eligible you need to make the majority of your income from self-employment, be self-employed already and have a tax return from 2019. For those that don't have three years of accounts, the Treasury will look at what they do have.

However, here's the kicker: the money will not be available until at least June, Chancellor Rishi Sunak says. Until then, you can apply for benefits, including universal credit, which has been raised to up to £409.89 a month for single people over 25, as long as you don’t have more than £6,000 of savings. You could also claim up to £73 a week in employment and support allowance. The website StepChange has a benefits calculator.

If cash flow is an issue at the moment, you can dip into your tax savings because the deadline for self-assessment payments has been delayed by six months. While normally you’d owe tax by the end of July, you now have until 31st January 2021 to pay, though remember you will have to find the money by then.

If you have a mortgage you could apply for a mortgage holiday, where banks have to offer you a three-month break. Whatever you do, don’t just stop paying it; you need to call your bank to agree this first, otherwise your credit score could be ruined.

Banks are slowly agreeing to waive debt charges, too, extending credit card limits, though opt for a 0% purchase card if you need to shop on a credit card so you are not paying huge amounts of interest. Banks are also starting to extend interest-free overdrafts. Barclays yesterday announced it is cancelling all arranged overdraft interest between 27th March and 30th April automatically, no need to contact the bank. HSBC has extended its interest-free overdraft facility on accounts from £25 to £300.

If you are desperate for income temporarily, perhaps because you work in an industry like hospitality or entertainment which has been put on pause, there are overwhelmed employers looking for new temp staff. A Twitter thread was created by financial journalist @Simonnread yesterday, flagging businesses looking for workers to start in the coming days. Lloyds Pharmacy has 1,500 roles that need filling, supermarkets are after thousands more employees, Virgin Media needs call centre staff and care companies are looking for new carers they can train up quickly.