Earnings of highly skilled freelancers in Britain stagnated in the second quarter as Brexit uncertainty hit demand for their work, according to a survey that contrasted freelance pay with strengthening pay growth among full- time employees.
The quarterly average earnings among the top categories of freelancers rose to 20,480 pounds in the April-June period from 20,474 pounds in the first quarter, a 0.1% increase, according to the Association of Independent Professionals and the Self-Employed (IPSE) trade body and online freelancer portal People Per Hour.
Official data on Tuesday showed Britain’s workers received their biggest pay rises in more than 11 years this summer as the unemployment rate fell back to its lowest since the mid-1970s, even as the political crisis over Brexit deepened.
Average day rates charged by freelancers also barely rose in the second quarter, the survey showed.
Research from the Resolution Foundation has discovered that one in twenty workers don’t receive paid holiday which they’re entitled to. They also found that one in ten workers are not even given a payslip.
The Resolution Foundation believes that these results expose the extent to which unlawful working practices are happening in Britain.
HMRC uncovered that 200,000 workers were not receiving the minimum wage last year, and individuals 25 and under were twice as likely to be underpaid. People over 65 were the most likely to not be given their legal 28-day entitlement to paid holidays.
HM Revenue and Customs (HMRC) has issued more than 100,000 self-employed people with TV license-style warnings after they failed to meet new digital tax requirements.
Since April, small business owners have been required to submit their tax returns online using specialist software. But as Telegraph Money revealed last month, huge numbers of self-employed people have failed to do so. Now the taxman is fighting back by sending 120,000 warning letters to business owners, warning that they have missed the deadline for making their first filing under the new regime, which was Aug 7.
However, in the first year after implementation, no fines will be issued to those who have failed to meet the deadline, HMRC said. In normal circumstances those taxpayers would be fined at least £100.
The introduction of the new rules, known as Making Tax Digital (MTD), has been troublesome for the authority. Small business owners, trade bodies and MPs criticised the changes ahead of the launch, arguing that the reporting rules were too onerous. In total, 1.2 million businesses will be forced to comply with the new regime. About 490,000 should have completed their first return by August but 120,000 have yet to register.
An HMRC spokesperson said: “We want businesses to join MTD without fear of getting it wrong – HMRC are not penalising those transitioning.
“Our letters are the latest in a series of communications to encourage those remaining businesses to join the 1.1 million who already have signed up and ensure they know how to access support to do so if they need it.” The true cost of MTD has been the subject of much argument between industry groups and the tax authority. The Federation of Small Businesses said self-employed people were being hit with £600 bills for new software. HMRC has downplayed this figure, suggesting implementation costs are closer to £100.
Workers on zero-hours contracts will now find it easier to apply for a mortgage with HSBC as the bank joins a growing number of lenders relaxing the rules for those not in full-time work. Mortgage applicants will no longer have to supply as many earnings and tax evidence – something the bank says has previously hindered their chances of getting on the housing ladder.
While they provide flexibility for many, these contracts have been controversial as they don’t offer the certainty of regular work for employees – many of whom don’t have a choice but to accept this type of work. Lenders like certainty, and not having a guaranteed regular income means that applicants are viewed as higher risk. As such, some banks and building societies outright refuse to lend to this type of worker.
HSBC borrowers will now only have to show proof of one year’s employment with the same employer rather than two, as well as just one P60 tax form rather than two. Instead, they will now have to show the bank the last three payslips they received, rather than just the one payslip that they previously asked for.
In California, where many Gig economy companies are based, lawmakers have passed a bill that paves the way for gig-economy workers to get holiday and sick pay. Some estimates suggest costs for firms like Uber would increase by 30% if they had to treat workers as employees.
These companies may have quickly achieved multi-billion-dollar valuations but they are nearly all making heavy losses, so anything that increases their costs could make them unsustainable.
Taskrabbit, a platform which puts customers in touch with people who can do small jobs, such as assembling furniture, will also have a challenge to make the books balance. Imagine, for instance, the cost of giving health insurance to the 60,000 who do the tasks, some on a regular basis; others very occasionally.
Other lawmakers around the world are moving to give gig-economy workers greater rights. Of course, the end result could be that the giants of the industry, like Uber, survive while the smaller challengers go to the wall.