In HMRC

An analysis published on Friday last week by the TUC that suggests that growing self-employment is generating low pay amongst precariously engaged workers has been criticised by the Association of Independent Professionals and the Self Employed (IPSE) as “misleading”.

The TUC report found that almost half (49%) of the self-employed adults aged 25 or over it polled were earning less than the national minimum wage (NMW) and attributes the low pay to “sham forms of self-employment” that unscrupulous employers force on workers in order to dodge taxes, circumvent NMW obligations and deny employment rights.

Notably absent from the report, however, was any mention of highly skilled contracting professionals, from IT consultants working via their own personal service companies or locum teachers, nurses and other medical professionals, many of who work for a series of employers via umbrella companies.

Agreeing that more is needed to be done to protect vulnerable self-employed people, IPSE’s Deputy Director of Policy, Andy Chamberlain cited the association’s own research with the Community Union showing that the proportion of self-employed people at risk of being vulnerable is likely to be 9 to 13% of the total independent flexible workforce.

IPSE, he said, was pressing for the Government to support training as a path out of low pay for the self-employed and believed that the best way to tackle exploitation by unprincipled employers was with a clear, statutory definition of self-employment.

The TUC’s limited analysis, he noted, wasn’t supported by the testimonies of self-employed people themselves: multiple surveys have revealed that self-employed people are happier than employees on average. He added: “Rather than misleading characterisations of self-employment, we need a strong focus on the real challenges the self-employed face, whether that’s being paid on time, receiving a fair deal on maternity pay and Universal Credit, or negotiating a complex tax system.”

Many of the people earning below the NMW in the TUC’s analysis, he noted, were likely to be made up of the 1.5 million people who work in part-time self-employment such as gig work, which provided them with a source of supplementary, flexible income that most are happy to have.

Chamberlain also cited a report from an Oxford research unit, released on the same day as the TUC’s analysis, showing that Uber drivers in London earn approximately £11 per hour after costs – a little above the £10,20 recommended living wage.

Chamberlain concluded: “… it would be a mistake to conflate ‘bogus self-employment’ with the ‘gig economy’ or wider self-employment – and then try to regulate these ways of working into oblivion. That just hurts the overwhelming majority of people who actively chose to work in this way.”

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