Self employed + furloughed

Satchmo23

Hi, my income is 90% self employed work, 10% employed (PAYE), approx. I would be eligible for the Self Employed Income Support Scheme and have the option of being furloughed from the employed work. Question is, if I opt for the furlough would I still be able to claim the SEISS?? I haven't been able to find any info on that specific situation. Also, not sure if it's relevant, but the majority of the self employed work is carried out at the place that employs me for the 10%! 

Jeremy535897

A very interesting question. The issue of a director of a limited company furloughing himself and then setting up as a sole trader to work for the customers of the limited company has been hotly debated, and my view is that in such circumstances the director cannot furlough himself and claim CJRS. Your circumstance is slightly different.

Firstly, if you are eligible, you can claim SEISS. The employment is irrelevant to that, unless it becomes so significant that you can't argue you intend to continue as self employed when claiming SEISS. As you are talking about furlough, this is most unlikely. You would also have to show that your self employment was adversely affected by coronavirus, and if this company is your main customer, how much you do for them will influence this.
Secondly, it is somewhat unusual to work for an employer and also provide services to that employer on a self employed basis. How does that arise?
Thirdly, the CJRS rules say that "To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation or any linked or associated organisation. This includes providing services or generating revenue." I think that means that you would not be able to do any work for them, either as employee or as self employed, whilst furloughed.

But:

The Treasury Directive (which takes precedence over the guidance) says:
"6.1 An employee is a furloughed employee if-
(a) the employee has been instructed by the employer to cease all work in relation to their employment,
(b) the period for which the employee has ceased (or will have ceased) all work for the employer is 21 calendar days or more, and
(c) the instruction is given by reason of circumstances arising as a result of coronavirus or coronavirus disease.
6.2 An employee has not ceased all work for an employer if the employee works for a person connected with the employer (see paragraph 13.4) or otherwise works indirectly for the employer."

This is not quite so clear. It focuses on work "in relation to their employment" in 6.1(a). If the duties of the employment are specific and separable from the work done as self employed, 6.1(a) would not appear to be a problem. In 6.2 the employee must not "otherwise work indirectly for the employer", and maybe this would catch doing self employed work, but that is not wholly clear, as there is nothing indirect about it.

In conclusion, you can certainly be furloughed as well as claim SEISS, if you do no work for your employer, either as employee, or self employed. It may be possible to continue the self employed work and be furloughed (and claim SEISS), but that is doubtful.

Satchmo23

Thanks so much for your reply. I should clarify: I work as a self employed instrument teacher within a school. Our contracts are between teacher and parent and we invoice the parents directly. We use the school premises as a venue for lessons but are not employed by the school. I also work as an exam invigilator during the public exams, which is usually around 5 or 6 weeks per year, and for this I'm employed by the school.
I am currently teaching some online lessons (but with a reduced amount of students) and continue to invoice parents directly. The school is suggesting to furlough me from the invigilating work which of course won't be required this year.

Jeremy535897

In this case I don't think there should be a problem with you being furloughed by the school, as you are not doing work for the school, but the parents of children in the school.