14 Feb Are you self-employed in name only?
I remember back in the 90s trying to decide if I was self-employed or an employee. At the time I was working in the media and had done several, back to back, short term contracts and could have been classed as either. In fact, a little ruse being used by companies, big and small, was to put a day’s break between contracts so the person could be deemed self-employed.
I vividly remember considering the upside and downsides of both – flexibility and justifiable business expenses as tax deductions of the self-employed versus pension contributions, holiday pay and sick pay for members of staff. As a young worker you could easily be drawn to the former. Who thinks pensions or maternity pay aged 21?
At the same time as I was pondering, the practise of breaks between contacts with the same employer was brought into question, and many freelancers and self-employed people were made employees almost overnight. A simple break in the contract was deemed not enough to make a person self-employed. Now, like then the status of being self-employed is being tested.
We saw before Christmas the case brought against Uber over the status of their drivers and similar confusion remains over the status of Deliveroo and Hermes deliverers. Technological advances are putting our legal definitions under the spotlight.
The fact this debate is back in the public arena has to be a good thing now that 5 million people in the UK are classed as self-employed. However, as the latest court case with Pimlico Plumbers shows, all business sectors are ripe for review, not just the ‘gig economy’.
Determining the correct status is vital. The individual needs to have their rights protected, business needs to support their employees and government needs their state contributions.
Getting it right is a win/win for business, government and the individual, but getting it wrong is a severe loss – loss for the employee and government.
No one is looking to create new taxes or increase taxes – least of all me – but paying the correct taxes and supporting people who are in all but name employees is essential.