Government must develop statutory self-employment definition, says IPSE

Posted On: 
19th May 2017

IPSE calls for statutory definition of self-employment in Taylor Review submission.

To help end the confusion about what does and does not constitute self-employment, a fundamental rethink of employment is necessary, says IPSE.
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A statutory definition of self-employment must be created to end confusion and ensure working for yourself is viewed as a positive, valuable way of working, IPSE, the Association of Independent Professionals and the Self Employed, called for in its official submission to the Taylor Review of modern employment practices.

Having appeared in front of one of RSA chief executive Matthew Taylor’s panel sessions in March, IPSE, who represents the UK’s 4.8 million self-employed, has now submitted its official response to the review, in which they laid out clear steps government should take to ensure working for yourself remains a positive and attractive way of working.

To help end the confusion about what does and does not constitute self-employment, a fundamental rethink of employment is necessary.

There are currently definitions in law for what it means to be an employee and what is means to be classified as a worker, but not for genuine self-employment. The definition should consider four key tenets:

  • Having autonomy in their work. For freelancers this means the ability to send substitutes and for there to be no requirement to do work outside agreed work

  • Having control over working arrangements. Self-employed people are able to decide how to complete their tasks and the hours and location they choose to work in.

  • Taking on business risk. Self-employed take responsibility for their finance and tax responsibilities and can be paid on a per task basis.

  • Level of independence from clients. This would include things such as having to wear a uniform or using your own tools and equipment to complete your work

IPSE believes the Taylor Review should also consider how the welfare system can be adapted in order to better support the self-employed, particularly relating to issues of Universal Credit and maternity and paternity provisions.

Better provisions, such as auto-enrolment, must be considered to allow the self-employed to better save for retirement. IPSE also called for the need to incentivise training and skill development and the importance of undertaking a strategic review of the tax system to ensure it is fairer, more efficient and more adaptable.

Simon McVicker, IPSE Director of Policy, said: “Whatever the outcome of the upcoming general election, self-employment will be a big issue for the next government. It is imperative, therefore, that the review is able to identify where improvement and fairness is needed and make suggestions to achieve this.

“The need for a statutory definition to end the confusion surrounding self-employment is glaring. It is shocking that the first port of call for someone looking to determine their status is through the courts – particularly so if they’re low-paid. It’s costly, time-consuming and utterly exhausting. There must be a fairer way, there must be an easier way, there must be a quicker way – and a statutory definition would achieve this.

“A better welfare system is required, particularly with regards to maternity benefits, while pension provisions are still inadequate for the self-employed to effectively save for a comfortable retirement.

“The current tax system remains outdated, therefore the need to overhaul it with a more progressive and flexible system that fairly accommodates for those working in self-employment has become abundantly apparent.

“The self-employed add tremendous value and worth to the UK and we hope the new government will heed the review’s suggestions by rewarding them with the provisions they deserve and the support they need.”

IPSE’s Taylor Review submission can be read in full here.