On April 14th, the Office for National Statistics released data detailing the surge in self-employment in the UK. The self-employed or partially self-employed now account for 14.9% of the overall workforce according to the ONS, equating to 4.46 million, one in every seven workers.
The findings have sparked multiple debates as to whether these figures suggest a rise in entrepreneurialism within the country. Trades Union Congress have suggested that the incline is due to lack of jobs available, however there is limited evidence to suggest this. It has also been suggested that issues such as ageism could also be creating barriers to traditional employment as people are working for longer, which could be resulting in the increase in self-employment figures.
Nevertheless, it has not been suggested that a major factor in this increase could be affected by current taxation laws and also due to the changing face of businesses and their needs.
Kit Scott-Brown, Managing Director of InterExec comments:
‘what is being ignored in this discussion is that under current tax law it can be more economically beneficial to treat yourself as being self employment than it is to treat yourself as being employed, thus encouraging more people to explore this employment route since the financial crisis.
'Also, many have overlooked the fact that as the needs of businesses change, so does the face of their workforce. Many companies were forced to dramatically reduce in size during the downturn, so many have looked towards subcontractors and freelancers to replace their lost employees and meet their slowly expanding employment needs. This may explain a need for self-employed workers, especially in light of freelancers being recorded as increasing by 69,000 since November last year. Law firms, also for example, have seen a specific call to restructure their business models and outsource more of their tasks to restore profitability.
'As businesses both large and small have to become creative with their workforce, so does the workforce have to respond to these changes, as we have started to see.'