Can I Freelance Whilst On Furlough?

The good news is that yes, you can take on work from other sources, even whilst on furlough. This could be another job entirely, freelance work or a zero-hours contract.

What is furlough?

Furlough is a temporary period of suspension or ‘discharge’ from work. Employers can furlough workers for a variety of reasons, such as changes to funding or budgets. Rather than making staff redundant if there isn’t enough work to go round, an employer will give staff temporary leave.

Can I still work for my employer if I’m furloughed?

You won’t normally be able to take on any work or provide services for your current employer if you’re furloughed, although you will be able to take part in training if necessary.

What about if I work for multiple employers?

Each employment is treated separately, so if one employer furloughs you, it doesn’t mean you have to stop working for someone else.

Can I be self-employed while furloughed?

Yes, you can become self-employed, start a side-hustle, or carry out freelance work whilst on furlough – just make sure that your current contract allows you to do this! Some employers include no-compete clauses in employment contracts, which could prevent you from doing similar work for others.

What will this mean for paying tax?

Any money you earn from self-employment is totally separate to the wages you earn from your employer. They won’t know that you’re self-employed unless you tell them (or if you decide to pay your tax bill through your tax code), but it does mean that you’ll need to report this income yourself, and pay the right amount of tax on it.

Thanks to the trading allowance you’re allowed to earn up to £1,000 from self-employment in a tax year, without needing to tell HMRC or pay tax on it. It’s pretty handy if you’re just doing the occasional bit of freelance work.

If you do earn over £1,000 then you’ll need to register as self-employed and submit a Self Assessment tax return.

Going back to work

It’s worth thinking about what happens if your employer suddenly ends furlough. Even if they give you plenty of warning (and they should) they will expect you back at some point.

It can make things awkward if you already have another job, or have promised work to a lot of clients. The good thing about freelancing is that it’s a more flexible way to supplement your income. However, it can still be difficult to manage if you have to go back to full-time work.

The other option is to keep freelancing in your spare time when furlough ends. This gives you the stability of additional income, which is often a plus. It also helps you to develop new skills and explore other interests. Just make sure you’re not freelancing on company time!

If you’re unsure about anything, talk to one of our advisors about our online accounting services for freelancers by calling 020 3355 4047, and get an instant online quote.