Freelancers’ training needs 'aren’t being met'

Self-employed people do not have their training needs reflected in government policy, which acts as a “disincentive” to up-skill such freelance workers, an independent report has found.

According to the Skills Commission, which unveiled the report on the eve of National Freelancers Day, such a disincentive to train freelancers must be removed if the UK wants to boost productivity.

The disincentive has its roots in the tax system, in which the provision of training by an outfit to a freelancer can be used by HM Revenue & Customs as evidence of ‘employment status.’

Wishing to avoid the “cost implications” of an employment relationship with a freelancer, outfits refrain from including such workers in their training schemes, the commission says.

Writing in its report, the independent skills body recommended: “HMRC need to re-examine clauses in the tax system that might discourage training, especially for the self-employed.”

It added: “Structures and incentives… [must then be] put in place to support individuals in investing in their own skills development.”

If these actions are taken, the UK’s framework for skills can remain relevant and, crucially for self-employed people, individuals can “progress upwards through the labour market.”

But “at present, the skills system in the UK is not adequately matched to the modern structures of work in 2014,” adds the commission, referring to the rise of freelance workers.

Like other flexible staff, such independent workers already receive “lower levels of training” than employees, who are also suffering as in-work training has been in decline since 2001.

Yet it is the training needs of the growing number of people who are working for themselves that the commission appears to prioritise as the issue most in need of an answer. It said:

“The labour market has become increasingly flexible, with a greater proportion of the workforce now self-employed or working in insecure and part-time arrangements.

“This raises the question – who is responsible for the training of individuals not working as regular employees?”

If it is the government’s responsibility, then ministers appear to be ducking it. The report states: “The training needs of [the] self-employed… are not reflected in policy.”

Leaving it up to freelancers’ end-users is not a recommendation the commission makes in its report. Indeed, while the disincentive to train due to employment status concerns is genuine, it “can be used as an excuse for not training.”

Freelancers’ trade group IPSE, which welcomes the report, says it has put support for the self-employed’s training needs and skills development in its manifesto.

“It’s encouraging to see…[from the Skills Commission a] call to remove disincentives to training in the tax system,” said the group’s policy development manager George Anastasi.

“Recognising the flexible nature of the UK’s workforce and removing barriers to skills should be central themes in the run up to next year’s general election.”

Editor’s Note: Related Reading –

Digital firms need training tax breaks, Osborne told

Simplicity still eludes employment status cases

A freelancer’s guide to expenses

 

19th November 2014

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