IPSE: Self-employment needs statutory definition

Tuesday 11 April 2017

Self-employment is often a grey area in government legislation, making it unclear which kind of workers fall under the definition. 

This can be especially challenging for those who are operating on a contractually operating on a freelance basis but work regular fixed hours. In law, there are definitions for what could be classified as a worker and an employee, though there is nothing to define self-employment. 

In order to make a proper distinction between employment and self-employment, IPSE wants the category of self-employment to fall under four criteria. The first of these is having autonomy in work, meaning that it must be possible to send substitutes and there needs to be no requirement to do extra work outside of what is already agreed. 

IPSE also suggests that having control over working arrangements is another key element. It emphasises that self-employed people need to be able to decide how to complete their tasks, hours and where they are working.

Self-employed individuals must also take responsibility for their finance and tax responsibilities and can be bought on a per-task basis, giving them much more flexibility than full-time staff.

The level of independence from clients is another key element and includes things such as having to wear a uniform or using personal tools and equipment to complete work. 

Simon McVicker, IPSE director of policy, said: “To be an employee is defined in statute, as is being a worker. But, somehow, to be self-employed is the default for everything else. This is a rather negative position and it creates confusion as it lacks clarity.

“We want a positive definition so the genuinely self-employed have peace of mind and unscrupulous companies cannot exploit the confusion and push people into false self-employment.”

What’s more, IPSE wants the Taylor review to look at encouraging pension uptake and savings for the self-employed along with better maternity, paternity and childcare support. 

The government is also a key factor, as it has a role in incentivising training and skills development to enable people to advance in their careers irrespective of whether they are freelancers or in full-time employment. 

A key distinction between self-employed and full-time workers is that freelancers need to arrange their own tax payments. To make this process easier, freelancer and contractor accountants can be especially useful, helping to take away much of the stress associated with working out work-home pay.


By Victoria McDonnell

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