HR · 13 March 2017

37 reasons why the self-employed have it worse than employees

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There can be many downsides to being your own boss

The Federation of Small Businesses (FSB) has published a list of 37 major challenges facing self-employed workers, and has urged the government to re-think plans to increase national insurance contributions (NICs).

Following the Spring Budget announcement on 8 March, the UK’s leading small business organisation has released the list in protest of the chancellor’s aim to change NICs, and to highlight the disadvantages self-employed workers face when compared with being a UK employee.

In a statement, the organisation’s national chairman, Mike Cherry, said that the government’s plan would put an added strain on entrepreneurs, which could damage the economy.

“The risks that the self-employed face makes them fundamentally different to employees. Setting yourself up in business can be incredibly rewarding and exciting, but there are many risks, and the government provides few safety nets,” said Cherry.

The controversial new measures have caused rifts in the Conservative party since the Budget, with several senior party decision makers, including a government minister, publicly rebelling.

Philip Hammond has received intense criticism, and prime minister Theresa May stepped in to announce the process of legislating the changes to NICs in parliament would be delayed until Autumn this year.

In his speech on 8 March, the chancellor announced that the nine per cent NICs self-employed people currently pay on any annual earnings above £8,060, would increase to ten per cent in April next year and 11 per cent in April 2019.

“We called on the government to think again, and there is at least now a delay to allow ministers a rethink,” added Cherry.

“They must come to their senses. Every item on this list shows just how different life is like for the UK’s 4.8m self-employed. The government should be spending time focusing on issues like these rather than picking the pockets of hard-working strivers.”


37 problems facing the self-employed

  • Insecurity/volatility of income
  • Poor access to mortgages
  • Having to risk their houses and personal income to build their business
  • No redundancy pay
  • No access to pensions auto-enrolment
  • No employer pension contributions
  • No maternity pay
  • No paternity pay
  • No adoption pay
  • No rights against unfair dismissal
  • No holiday pay
  • No right to notice
  • No sick pay
  • No compassionate leave
  • No carers leave
  • No employment rights in relation to discrimination
  • Poor broadband for homeworkers
  • Poor design of universal credit for changing incomes
  • Late payment from large businesses
  • Unfair contract terms from big business
  • Complicated regulation designed for big business
  • Poor access to training
  • Poor access to business support
  • No government savings products designed for the self-employed
  • Complicated upcoming quarterly tax reporting
  • Complicated reporting requirements for universal credit
  • Isolation of self-employed workers
  • Hard to access business credit
  • Poor protection from business crime
  • Poor protection from cyber crime
  • Poor access to the courts to settle legal disputes
  • Poor access to legal advice
  • No limited liability protection for the self-employed
  • No access to enhanced employer benefits, like income protection insurance
  • No free eye tests from employers
  • Personal responsibility for legal liabilities
  • High cost of tax administration

Go back an catch up on the five things in the Spring Budget you may have missed

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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