5 tips to help the self-employed without access to the COVID-19 grant

When the Chancellor, Rishi Sunak, unveiled his COVID-19 support grant for the 5 million of us who are self-employed in the UK, many let out a huge sigh of relief.

But, Rishi Sunak himself has already admitted – it won’t cover everyone.

More than one million self-employed people are estimated to be unable to access the grant. They might need to fall back on alternative schemes, savings or benefits to get them through the crisis.

If, like me, you’re in this position, you may be needing to find ways to tighten the purse strings. Here are five tips I’ve found useful.

This article is not personal advice. If you need more help please speak to a financial adviser. Tax rules mentioned can change and the benefits depend on individual circumstances.

1. Reach out to your creditors about the new FCA rules

To help borrowers deal with debt during the pandemic, the Financial Conduct Authority (FCA) has issued temporary rules for creditors.

If you have been negatively impacted by coronavirus and your income has taken a hit, you might be able to pause payments on loans and credit cards for up to three months, without it impacting your credit rating. Consumers might also be able to secure zero-interest on pre-existing overdrafts of up to £500 on main personal current accounts for three months.

To find out more information , contact your bank or creditor. With many firms experiencing a high demand in calls, it might be quicker to see if you can benefit from these new rules by checking their website before you call.

Please note, these measures won’t replace normal rules where these would be more suitable for someone in serious and immediate financial difficulty. Consumers in financial difficulty should contact the Money Advice Service (MAS) for further guidance.

2. Chase down outstanding invoices

The Federation of Small Businesses estimates 50,000 firms go out of business every year due to late payments. And 43% of freelancers write-off at least one unpaid piece of work.

When many are struggling, it might feel awkward chasing down outstanding invoices. But if you’re waiting to be paid for work you’ve done, don’t be afraid to get in touch with them.

It might be on their to-do list and chasing outstanding invoices could remind them and speed things up.

3. Double check your accounts as expenses might be different now

If you’re now working from home, you may be able to expense a proportion of your household bills, saving you tax payments. You’ll need to find a reasonable way of splitting up the bills, you can find more information and examples on the government website.

The kind of things you can claim on include:

• Heating
• Electricity
• Council Tax
• Mortgage interest or rent
• Internet and telephone use

Keeping accurate records of your expenses could help you to shield more of your money from tax.

4. Cut down your spending

It may sound obvious, but it’s worth double checking your outgoings.

As a self-employed financial writer, it’s important to stay up to date with what’s going on. But I found that I was paying monthly subscriptions to far more publications than I needed to.

Taking a few moments to glance through your spending could save you more money than you might imagine. Lots of little savings can add up.

How to give your finances a spring clean while you're at home

Another option is to call service providers and ask if they might be willing to give you a discount. Lots of broadband services have now removed data caps and phone companies are offering new phone packages at low prices to help people stay connected.

For some outgoings, you may also be able to find cheaper alternatives which offer you more for the same amount of money. An example is advertising, one study found that writing your own blogs and creating unique website content costs 62% less than traditional marketing and generates three times more leads.

5. Look where you can free up cash if you need to

Sometimes, it doesn’t matter how much you try to cut back, you’ll need to break into money which has been tied up. If you’ve been keeping an emergency stash, now might be the time to make use of it.

If possible, try to avoid liquidating any investments. While the stock market has rallied in recent weeks, it’s yet to recover fully from recent falls. Selling now could mean you’ll get less money than you put in.

Hannah Duncan is an investment writer, and founder of Hannah Duncan Investment Content, with years of experience producing content for global leaders in finance and retail. Hargreaves Lansdown may not share the views of the author.

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