Responding to a government announcement of a consultation on how training for the self-employed is taxed, the Association of Independent Professionals and the Self Employed (IPSE) has set out four positive consequences for contractors if tax relief is extended to this area.
Skilled Umbrella Company employees and other high-end contracting professionals command the pay rates they do because end clients need the talents they can supply. But they face a disadvantage when compared to salaried employees in keeping their skill sets up to date: they not only don’t usually get included in in-house training programmes arranged for their permanently-engaged colleagues but, also unlike their salaried counterparts, they cannot claim tax relief for expensive skills development courses.
The government’s announcement that it will launch a consultation to collect views on the extension of tax-relief to the self-employed came in the Spring Statement. Such a reform would pave the way to the following benefits for contractors, according to IPSE’s Education and Training Officer, Olaitan Ajimobi:
- Training would become more affordable for contractors
Research from IPSE found that independent contracting professionals and other self-employed people were half as likely to have undergone any form of training in the previous 12 months. While it isn’t the only consideration, the sheer expense of training emerged as one of the principal obstacles. Extending tax relief to training would reduce costs substantially, significantly reducing this barrier and opening up more skills development options for contractors.
- The government appears to appreciate the value of independent, flexible workforce
Many contractors have expressed deep concern over the last year that the government isn’t supporting the flexible independent workforce as it should. But the move to extend tax relief to training would be welcomed by them as a major step in the right direction and a sign that the government is beginning to grant them the recognition they deserve.
- More contractor-friendly training policies are likely to ensue
IPSE is already calling for a series of reforms to widen skills development opportunities for independent professionals such as improving signposting to training providers, calls which are more likely to be heeded if the government is indeed adopting a more positive attitude toward those who work for themselves.
- More training options provide a gateway to improved income and career progression
For those struggling at the lower tiers of the skills hierarchy in the flexible workforce, IPSE’s own research has shown that the best way of improving conditions for them is by opening up access to skills development through training. Such a move would increase job opportunities and enable them to negotiate higher fees for their services.