Freelancing while furloughed from my own ltd micro company

leftism

Hi! currently furloughed as a sole ltd company director so receiving £600ish a month. 

As suggested by Martin Lewis, i’m trying to do some freelance work, to top it up. Does it matter if the work is exactly the same as the work I did through my company?

and is there any reason not to continue working in this way for the remainder of the furlough scheme?

(potential work + furlough money won’t be as much as what I was earning before all this)

thanks!

Jeremy535897

You are on very dangerous ground here, particularly if you have started freelancing only because you are furloughed. If you worked for someone else rather than your own company, they would be less than impressed if you went out to their customers to do work for them on your own account. It would probably be a breach of your contract of employment. You will be using your company's customers, suppliers, goodwill and maybe physical assets. There has been some debate about this issue on other threads, at great length, but my view remains that it is probably contrary to the exceptional purpose of CJRS and therefore fails the condition in paragraph 2.5 of the Treasury Direction. The fact that you will or may earn less is irrelevant.

leftism

Oh, sorry, I don’t be think I was clear. I’m not really going to their customers. I’m essentially a freelancer, I just usually pay myself through my company/ dividends. 

leftism

Oh wait, you realised that but were just illustrating your point weren’t you haha. 

LilElvis

Without any doubt HMRC will, in the future, be investigating claims made under the CJRS and what you are proposing will be at the top of the list of fraudulent claim scenarios they will be looking for. 

warby68

So work is still available and you can still do it but have furloughed yourself. Are you by any chance also working for the same clients and using the same tools of the trade? It sounds like it.
This one sounds like very thin ice.
Earning less overall won't be a justification for misusing the furlough scheme. 
There is no suggestion yet if or how any of these schemes will be 'audited' but sometimes unscrupulous things you do in haste cast a long shadow. 

Jeremy535897

leftism said:

Oh wait, you realised that but were just illustrating your point weren’t you haha. 

I don't waste time illustrating points. I answer questions. If you were a builder through a limited company and started selling nodding dogs on Ebay, that's not a problem.

silvercar

Doing the same sort of work for the same sort of clients, but as a freelancer rather than as a company is obviously dodgy. It also begs the question why you didn't just carry on working through your company? I guess the answer is that there is less work available, so this way you take furlough on PAYE plus the work for the the other clients and that goes some way to make up your income. Given that you are not allowed (at the moment) to claim furlough if you are doing any work for your company, this would seem to me to a case of deception; but your risk as to whether hmrc investigate.

leftism

I thought it fell under what ML described as the ‘wiggle room’ for ltd directors. He says:

• When furloughed, it seems acceptable that you can work for other people, so you could freelance yourself and work outside of your limited company.

I didn’t realise this is only acceptable if the work is completely different (building/ nodding dogs @Jeremy535897)

so, from what you lot are saying, if I get offered work that pays £400, id lose my £600 furlough, so id be better turning it down? Frustrating!

Jeremy535897

Martin's comments were made before the anti avoidance rule I described in my first post was published, so can't be relied on. What you can do though is furlough yourself for the minimum 3 weeks, wait till that expires, do a week's (say) worth of work, and put yourself back on furlough for 3 weeks. If your work isn't time critical, this is the best solution for you.

leftism

Jeremy535897 said:

Martin's comments were made before the anti avoidance rule I described in my first post was published, so can't be relied on. What you can do though is furlough yourself for the minimum 3 weeks, wait till that expires, do a week's (say) worth of work, and put yourself back on furlough for 3 weeks. If your work isn't time critical, this is the best solution for you.

Ahhhhhh, got you. Brilliant, cheers mate.