In a new independent report into self-employment, Cambridge Satchel Company founder Julie Deane has advised prime minister David Cameron to end the discrepancy between the support that employees and the self-employed are entitled to.
The recommendations come at a time when a record 4.6m people in the UK are self-employed with contractors making up some 15 per cent of the British workforce.
The policy document which was commissioned by the prime minister last year also highlighted the need for increased provision of financial products which cater to the self-employed.
Recent research carried out by the Department for Business, Innovation & Skills (BIS) found that more than ten per cent of self-employed people have struggled to get a mortgage because of their employment status. Deane explained in the report: A reluctance to commit to regular payments of a fixed amount, and the inability to access the money if needed were seen as barriers to getting a mortgage.
in addition, an issue raised by a lot of respondents was that mortgage providers required proof of continuous earnings, in some instances for up to five years? income. Whilst this is easier to provide for those with a regular salaried income, the self-employed, whose work patterns and income can vary over a long period, felt this posed a real barrier to overcome if they were to access a mortgage.
In an effort to remediate this problem, HMRC has been working with mortgage lenders to allow contractors to use their tax calculations rather than payslips as documentation when applying for a loan but the Cambridge Satchel Company founder has called on the government to publicise this more widely.
Deane started her company originally focused on making traditional leather satchels for the schoolchildren of Cambridge from her kitchen table. Her motivation for becoming self-employed was to be able to send her daughter to another school, but she surpassed this by growing the brand into a a company with a multi-million pound turnover. Cambridge Satchel Company products are now stocked in more than 120 countries around the world.
The Federation of Small Businesses (FSB) welcomed the recommendations. As someone who founded and built a small business of her own, our members see Julie Deane as one of their own, fully supporting the work she has done as part of this review. Choosing to become self-employed is far from an easy path to take and the government is right to seek to improve the safety net to catch people if they are unexpectedly unable to work, said FSBpolicy director Mike Cherry.
we encourage ministers to read this report carefully and take on board its recommendations. Particularly important are the recommendations to bring maternity allowance into line with statutory maternity pay and those relating to access to more flexible finance solutions. For too long the self-employed have been frozen out of getting fair access to mortgages, insurance products and pensions.
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