Umbrella Company trade association the Freelancer and Contractor Services Association (FCSA) has firmly endorsed the value of the UK’s professional contracting workforce following remarks made by Britain’s “Jobs Tsar,” Matthew Taylor, which implied that UK businesses are exploiting self-employment laws to avoid tax.
In an interview with the BBC, Mr Taylor, who was appointed last year by Prime Minister Theresa May to conduct a review of UK employment practices, said that he has seen evidence that some employers are deliberately using gig workers to dodge paying tax and National Insurance Contributions to the Treasury.
The review was launched amidst concerns about low pay and precarious work in the gig economy, which relies heavily on temporary contracts. Mr Taylor is expected to conclude the review with recommendations for reforming the regulation of the country’s modern working practices.
His comments came shortly after the Trade Union Congress (TUC) published a report claiming that the spread of “insecure employment” in the UK is costing the Government approximately £4 billion every year. The TUC’s study says that more than half of this (£2.1 billion) can be accounted for by the rise in low-paid self-employment, which results in significantly less income tax and NICs being collected by the Government. It also claims that the rise in zero-hours working has diminished the public finances by a further £1.9 million.
FCSA CEO Julia Kermode responded by pointing to the many recent tax policy changes that have specifically targeted the self-employed. As a result, they have been left both worse off financially and feeling undervalued by a Government that claims to recognise their importance.
The direction of current policy, she continued, appears to imply that permanent employment is always preferable to other means of working, an assumption that flies in the face of the reality of the current workforce.
Noting that self-employment is not a new phenomenon, as it began in the early 2000s, Ms Kermode emphasised that labour market data from the ONS does not support the belief that it has increased suddenly. Instead, the figures show a plateau in self-employment at a constant 15 per cent for the last few years.
She added: “It is widely acknowledged that the flexible workforce has played an important role in the UK’s economic recovery to date, so I would appeal to the policy makers not to penalise the workers and the businesses that have been the financial backbone of the UK in recent years. FCSA is already engaging in the Taylor Review of Modern Working Practices, and we will continue to lobby tirelessly on behalf of the 120,000 contractors that our members support.”