The government should create a new post of Minister for Freelancing, or nano-enterprise, to act as a champion of UK freelancing, at home and abroad.
Issuing the call, the PCG said officially appointing an “ambassador” for freelancing would give the responsibility for helping its practitioners flourish to a single minister.
It was sounded in its Manifesto for Freelancing, the first in the group’s history, which calls for “fairness, clarity, and recognition” for the UK’s freelance workforce.
Fairness, because the “iniquitous” IR35 tax legislation puts an “unreasonable” burden and stress on freelancers, and loses the economy an estimated £1.2billion a year.
Clarity, because the distinction of who is, and who is not, an employee is unclear, as is the distinction between a ‘contract of service’ and a ‘contract for services.’
And recognition, because freelancers are a “unique sub-set of self-employed workers” who do not necessarily seek growth or employees and should be recognised as such.
In other words, freelancing should be acknowledged as a business model and feature on the small business remit, rather than on the state’s employment and social agendas.
John Brazier, PCG’s managing director reflected: “We know that freelancing is helping business cope with the worst recession we have seen for 60 years.
“But this has to be a fair deal. Freelancing must be recognised as a legitimate business model. Measures such as IR35 continue to place an unfair burden on nano-businesses.
Alongside the appointment of a minister for nano-enterprise, and the abolition of IR35, the group said it wanted the government to drop the proposed legislation on ‘income shifting.’
The manifesto denounces the plans as an attempt to treat jointly-owned business differently from normal businesses, by taxing the owners for their contribution (in labour), rather than on their profits.
“If we’re serious about growing an enterprise-friendly economy we need to address these faults in our tax system urgently,” Mr Brazier said.
Yet even if the IR35 and ‘income-shifting’ rules were both scrapped, the practical ability of freelancers to choose the right business structure would still be “limited,” the PCG wrote in a submission ahead of next week’s pre-Budget Report.
As a result, the tax rules prohibiting agencies, in practice, from paying freelancers gross unless they have a legal form, thereby depriving them of being truly self-employed, should be repealed.
Elsewhere in the manifesto, ministers are asked to pledge that “all government departments” will in future ensure that 10 per cent of their procurement budgets go to nano-businesses or freelancers.
Like all other UK citizens, freelancers’ personal data should be adequately protected, but, unlike some temporary workers, freelancers should be excluded from the Agency Workers’ Directive.
To also safeguard freelancing’s future, the PCG said the government should create and launch a scheme to encourage people aged 50 or over to consider freelancing as a career option.
Similarly, graduates and other job-seekers could help boost employment and provide businesses with skills if they went freelance, the group said, most notably in the creative industries.
Editorial image by Victoria Peckham
Dec 1, 2009
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