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FCSA urges Government to take considered approach to any new legislation for self-employed ahead of March 8th Budget

Following a BBC story out today (Feb 14th 2017) in which Matthew Taylor suggests that self-employment ‘reduces tax take to the Exchequer’ the Freelancer & Contractor Services Association is keen to step in and urge Mr Taylor and the Government to take a considered approach to any new measures ahead of the Budget in March.  Whilst FCSA supports any legislation to stamp out false self-employment and exploitation by unscrupulous employers FCSA would urge policy makers to recognise, not penalise, the 4.8m self-employed workers who carry out a diverse range of jobs for a diverse range of earnings across all sectors, from doctors and teachers to shopkeepers.  FCSA believes that any policy changes intended to tackle one particular group is likely to have unintended consequences across a raft of professions and sectors.

FCSA would also refute suggestions in the story that self-employed people tend to earn less so receive higher levels of benefits; ONS labour market data shows that on average a part-time self-employed person earns £9 per hour compared to £7.20 per hour for part-time employees.  For full-time workers the difference is less acute, with the average hourly rate for full-time self-employed standing at £11.60 compared to £10 per hour for employees.  Given the ONS evidence that the self-employed tend to earn slightly more than employees, it cannot be said that they cost the Treasury more in benefits due to their “low income”.

Julia Kermode, chief executive of the FCSA, the UK’s largest trade association whose members provide professional support services to some 120,000 freelancers and contractors said: “Today’s story suggests the possibility of new measures that will affect the self-employed being announced in the Chancellor’s Budget on March 8th so I would urge the Government to wait for the full outcome of Matthew Taylor’s review that is due in the summer and avoid any kneejerk reaction that would once again result in rushing through legislation that could have serious negative implications.  We have seen a raft of recent tax policy changes that have penalised the self-employed, leaving them financially worse off and under-valued by a Government that claims to recognise the economic importance of the flexible workforce.  Current policy direction seems to imply that permanent employment is somehow preferable to other ways of working which contradicts the current face of the labour market and the choices that people are making. 

“Self-employment is not new to the labour market – it started to happen more and more in the early 2000s however ONS labour market data does not show a sudden increase in recent years.  Moreover, data shows a plateau in self-employment at a steady 15% of the workforce since 2014.  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.”