Charlie Elphicke is MP for Dover and Deal.
Being your own boss. Working whatever hours you like. Building a business the way you want to. It’s no wonder the number of self-employed people is on the rise. Yet the ‘gig’ economy is not such a great gig when you are injured, sick or pregnant. Saving up for a pension or to pay tax bills is also a struggle for many.
For years, the self-employed have paid less in tax – yet got less in workplace support. Of course, the Budget brought the taxation of self-employed people into sharp focus. Yet if there is to be a levelling of the playing field, then it must go both ways. That’s why if there is to be any move towards all workers being taxed in the same way, there must also be reforms to workplace support too.
It’s time for a new and fairer deal for the self-employed. If National Insurance is going to be reformed, it is only right that the funds are used to pay for a reformed system of workplace support. A new, fairer system of workplace support for the self-employed would help level up the level playing field when it comes to sickness, injuries and parental leave.
A new deal for the self-employed would offer better ways of dealing with five key issues facing the self-employed – sickness insurance, injury insurance, parental leave, tax payments and pensions.
Sickness and injury cover
People in work should be treated equally and fairly – be they employed or self-employed. Employed workers get sick pay and better injury cover that the self-employed. If you’re self-employed and can’t work then you don’t have any money coming through the door. Meanwhile, insurance policies are expensive and the cover isn’t very good. That’s why any new deal must to cover sickness payments and injuries so that the employed and self-employed are treated the same way.
Allowance for parental leave paid to the self-employed is £139.58 a week. Far less than the minimum wage of £260 for a 35 hour week. Employed workers get a much better deal. That’s unfair – and the playing field should be levelled up so that workers and the self-employed are treated the same.
Self-employed people pay tax in a lump sum every January. They should have the option to do it as ‘pay as you go’ like employed workers. If the Government provided a PAYE-style tax payment assistance system, this would allow the self-employed to pay tax throughout the year.
Self-employed people historically received less support than employees from the state. Welfare benefits and statutory payments, particularly the State Pension, were lower. The self-employed now have access to the same State Pension as employees. Yet employees now have a system of auto-enrolment – extending ease of access to the system to the self-employed and making it easier for self-employed people to have access to simpler pensions would help self-employed workers to save for retirement.
A fair and level playing field of tax and work support
Any new deal for the self-employed must be fair. That’s why it’s right that any reform to level up the tax playing field must see a levelling up of workplace support too. It’s particularly important to tackle discrimination against women in the workplace, increase simplicity and security in the case of injury – and treat employed and self-employed alike.
This way we can give greater security to all workers – both employees and the self-employed – with a better all-round parental leave settlement. A level playing field with a fairer National Insurance system that works for everyone.