In IR35

The latest labour market data from the Office for National Statistics (ONS) reveals that the number of people in work in Britain has defied ‘economic gravity’ again by remaining at record levels.

In the quarter to April 2018, the number of people in work in the UK hit 32.3 million, remaining at a record-breaking level of 75.6%, not seen since 1971. Unemployment tumbled by 38,000 during the quarter, reaching 1.42 million. Average pay dipped from 2.9% to 2.8%.

A significant revelation in the latest figures for freelancers and contractors was that self-employment grew year-on-year by 9,000, reaching a total of 4.81. According to the Association of Independent Professionals and the Self Employed (IPSE), the continuing growth of self-employment reveals the new opportunities this method of working now provides.

The data shows that self-employment opens doors into the workforce for growing numbers of people who might otherwise be unable to access it, especially those over 65, disabled people, and new parents.

While Tara Sinclair of the global job site, Indeed, said that the UK job market was defying ‘economic gravity again’ by floating above a stuttering economy, IPSE’s Economic and Policy Adviser, Tom Purvis, pointed to the ongoing rise in self-employment (a category including contracting professionals working either via Umbrella Companies or through their own limited companies). Describing the growth of independent working as a labour market ‘revolution’ that was here to stay, he emphasised that rising numbers of people had, since the 2007-2008 crash, taken the leap into self-employment, drawn by its flexibility and control.

Purvis underlined that amongst the biggest beneficiaries of the self-employment revolution were people who would have struggled, often unsuccessfully, to gain a foothold in the workforce: the over-65s, new parents, and the disabled. He described self-employment for these groups as ‘an essential lifeline’ granting access to a stable, decent income and the self-respect from making their contribution to higher growth in the UK economy and greater tax revenues.

Purvis urged the government not to embark on measures that would make self-employment less attractive by extending reformed IR35 rules to the private sector. He added: “The changes to IR35 tax law have already caused serious problems in the public sector. Extending them to the private sector would be nothing short of a disaster – for businesses, the economy and for the many people who rely on self-employment as a route into the labour market.”

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