Effect of the Gig Economy on Contracting

In today’s digital world many of us no longer view work as a place to go, but as a task to be achieved, with surging demand from big companies driving the so-called ‘gig economy.’ There are concerns about the gig economy – as we’ve discussed previously, but at the high end of the freelancing sector, there are rapid growth opportunities for skilled, independent professionals. Typically these professionals work through their own Limited Company or through an Umbrella Company. We have seen several reviews into the modern way of working being instigated this year, and in the long term we hope that this increased focus will result in more stability and clarity for the contractor marketplace, specifically greater clarification on employment status. Most recently the spotlight has been firmly placed on the ‘Uber’ driver and ‘Deliveroo’ rider. With several employment tribunal cases which have already been heard and several more still ongoing, there seems to be a recognition that these workers are not employees, but that they are also not typically ‘self –employed’. They seem to be falling under the class of a ‘worker’ and Mathew Taylor (who is heading up the RSA Taylor Review into the gig economy) has suggested that the worker status is still useful but may need a new name and greater clarity. “I think it might be usefully described as dependent contractor. But a category which exists between full employment rights and self-employment, which captures the fact that people in that category have slightly more control, slightly greater flexibility, and in return they have slightly fewer rights, is actually a useful thing to do,”
So, this focus on the ‘gig economy’ seems to be leading us in the direction of 4 categories of worker:
• Employed – taxes deducted by the employer • Self Employed – operating as a Sole Trader or through a Limited Company • Worker (dependent contractor) – ideal candidate for the Umbrella structure, which will provide the required employment rights through the Umbrella Company, but not through the end client • Contractor/Freelancer – Operating through an Umbrella Company (if deemed to be inside IR35) or through their own Limited Company The independent think tank, the Social Market Foundation have released their latest report on self-employment in the UK, which calls for increased disclosure on gig workers’ pay. Danbro are proud to have supported PRISM, who commissioned the report, and it is hoped that the Government will act upon many of the recommendations that ensue. The overwhelming cry from the sector is for certainty, stability and transparency. This report will help in achieving these aspirations. You can read the full report here.  
For more advice on the options available to the contractors and freelancers, speak to one of our team on 0800 731 3178 or email us at enquiries@danbro.co.uk
Blog written by
Damian Broughton MBE

Share This Post