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Self-employed and the government: How can the relationship be enhanced?

Paystream News

Kerry Hull

Monday 12th Feb, 2018

What still needs to be done to strengthen the relationship between the UK government and the country's ever-growing self-employed workforce?

The rise in the number of people choosing to become self-employed over the past decade has been overwhelming and the very nature of the UK's working structure is now having to adapt as a result.

Traditional nine-to-five office days are on the way out, more people are working remotely than ever before thanks to technological advances, and there is plenty of evidence to show that contracting and freelancing can be well-remunerated, sustainable forms of working.

But as a new report from PRISM and the Social Market Foundation entitled the Rules of Engagement has highlighted, the country's employment and tax rules are not keeping pace with these changes to the labour market.

It's evident that the ever-growing self-employed workforce is here to stay, so what needs to be done to bring legislation in line with new ways of working?

What has the government done so far?

We recently published an article looking at the legislative changes introduced over the past few years and how these have impacted the UK's contractor market, from the Employment Intermediaries Legislation to Travel and Subsistence Legislation and later the public sector changes. But with self-employed numbers and the gig economy increasing in size all of the time, many workers have been left confused about exactly what their rights are.

The self-employed aren't going anywhere though. If anything, the younger generation is growing up seeing contracting and freelancing as new norms when considering their career options. Meanwhile, members of the ageing workforce are increasingly choosing to work for themselves part-time instead of retiring fully in order to save more money for their eventual retirement.

Flexibility is clearly going to be key to the labour market of the future, so what does the government need to do to make it more feasible for an increasing number of people to work as limited company contractors and freelancers?

What the self-employed sector wants from the government

Each year, contractors, freelancers and other self-employed individuals contribute some £119 billion to the UK's economy, according to data from the Association for Independent Professionals and the Self-Employed.

What's more, Britain will remain indebted to the self-employed following the sector's significant contribution to getting the country back on its feet following the economic crash of the late 2000s. Redundancies and job insecurities led many workers to start up on their own instead, subsequently boosting the economy hugely.

Therefore, it could be argued that the UK government owes the self-employed, and the Rules of Engagement report outlines a number of demands that this ever-growing proportion of the country's workforce would like to see from its leaders.

At the start of February, Business Secretary Greg Clark told the BBC: "We will be enforcing the rights that people have and are entitled to.

"We want to embrace new ways of working, and to do so, we will be one of the first countries to prepare our employment rules to reflect the new challenges."

This is certainly a positive step in the right direction, but there is much more that the self-employed want in order to bring their rights more in line with those of regular employees.

Requests in the Rules of Engagement report include clearer definitions of self-employed to prevent future confusion around IR35, as well as more detailed insights on who the self-employed actually are, rather than them being generally all lumped in together under one umbrella.

In addition, PRISM wants to see a long-term employment reform plan from the government, along with more publicity on non-compliance issues across the board, such as late payment.

It hopes that, over time, greater awareness of factors affecting contractors and freelancers will help to lead to fairer conditions for all, and a stronger relationship between the government and the self-employed.