Turning over a new leaf: Spring Statement could signal leap forward in training support for self-employed

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In yesterday’s Spring Statement, the Chancellor presented a cautiously optimistic view of the British economy, reassuring the public that there is finally “light at the end of the tunnel”. Amid the expected economic updates, the Chancellor also used the statement to shine a spotlight on an issue in much need of reform – the tax on training for the self-employed.

The case for overhauling our outdated approach to training

IPSE has consistently made a strong case to government to amend the current system and we are pleased they have listened. At present, sole traders are not entitled to tax relief for training in new skills. Not only is this system unfair – as employees are entitled to this right – but it also runs counter to the Government’s goal of creating a flexible labour market, prepared for rapid technological change.

The Government has now launched a consultation to gather views on extending the current tax relief to support self-employed people and employees when they fund their own training. IPSE will use this opportunity to once again champion the virtues of making training for new skills tax-deductible for the self-employed. Not only will this measure support the self-employed progress in their careers, but it is vital to improve the resilience of the UK economy.

The reality is that the Government’s skills strategy as a whole remains stubbornly focused on employers. Skills shortages in the UK are at “critical levels” while the self-employed – who now make up 15 per cent of the workforce – are half as likely as employees to have undertaken training in the last year. In its bid to support upskilling and retraining, the Government needs to make considerable changes to support this growing sector.

Options to support the self-employed to upskill

Finding the time and money to undertake training can be particularly challenging for the self-employed, especially when this means passing up the next paid opportunity. The consultation promises to investigate best practice taking place in other countries, and there are some innovative solutions we could learn from. Switzerland, for example, grants annual adult education vouchers to encourage specific groups to invest in upskilling.

Cost is not the only barrier to accessing training, though. For many contractors, training needs to fit around varying working patterns, which makes attending face-to-face courses unrealistic. Online courses can be more flexible yet sifting through the bewildering array of options can be a tedious task. The Government has a role to play in signposting high-quality training providers, to make completing training easier and more effective for the self-employed.

The Flexible Leaning Fund could also provide opportunities to the self-employed to fit training around unpredictable work schedules. Announced in last year’s Spring Budget, the fund provides grants of up to £1 million to projects that prove their ability to make learning easier to access, such as the provision of online and distance learning options. As the self-employed have a particular need to access online learning, the Government should specifically consider how projects support the self-employed when organisations bid for funding.

With 4.8 million people now choosing to work for themselves, the Government’s training and skills policy is increasingly out of touch with the way people work. The Chancellor’s focus on how to support the self-employed to upskill is welcome, if long overdue, and IPSE will seize this focus on retraining to highlight the wider changes needed in our national skills strategy.

Meet the author

Imogen Farhan

Policy and External Affairs Officer