IR35 policy out of touch with the way people want to work
- 26 Jan 2018
Rising self-employment may be drawing some negative headlines at the moment, yet research published yesterday by the RSA confirms it’s not all bad news.
The report sets out to categorise different sectors of the labour market based on the principle of “good work”, and reveals that the media portrayal of the self-employed as insecure, vulnerable and exploited does not capture the experiences of most people who work for themselves.
Coming on top in terms of economic security and job satisfaction are a group dubbed the “high-flyers”. Highly paid, secure, autonomous and fulfilled by their work, this group also share something else in common – a disproportionately high number are self-employed.
While this group tends to be business owners, the report also outlines a group termed “flexi-workers” who are typically engaged in gig work. The RSA finds this group actively choose short-term gigs over more traditional employment contracts because they value the autonomy and flexibility this type of work brings.
At the same time, the report does identify a more precarious group of workers, of which 20 per cent are self-employed. This group, who typically make the headlines, struggle to make ends meet and confirms that certain sections of the self-employed community are in a difficult or “vulnerable” position.
Once again, this report confirms that the self-employed are not a homogenous group, and should not be treated as such. It also shows many place enormous value on their self-employed status and do not want to be employees.
Despite this, the recent government strategy around IR35 is to force self-employed people onto the payroll of their clients, as if they were employees. The government says the public sector rules do not effect genuinely self-employed people – but this is wrong.
Because public authorities are now responsible for determining status, and liable for incorrect determinations, they are applying IR35 to all engagements, for fear of being hit with a big tax bill further down the line.
Many of the people unfairly affected by this disastrous legislation, are the ‘high flyers’ identified in the RSA research - highly paid, highly skilled, autonomous workers – exactly the sort of work the government should be supporting.
Instead the government is actually considering extending the rules to the private sector. IPSE will strongly oppose such a move, as we opposed the public sector change. We are gathering evidence of the impact of the IR35 changes in the public sector, which you can contribute to by taking our survey.
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