Call to extend tax-free training to freelancers

The government should extend tax-free training options to the self-employed to encourage “greater intergenerational equality,” a freelance trade body says.

At present, the self-employed, unlike employees, are not entitled to tax relief for training in new skills, the Association of Independent Professionals and the Self-Employed pointed out. 

Making them eligible would close an intergenerational gap in the UK because young people are more likely to be self-employed if they have no degree, IPSE said, citing a new report.  

Compiled by the Intergenerational Commission, the report found that increases in self-employment since the early 2000s have been driven by younger workers without degrees.

But “individuals in this group are likely to be in lower-paid and insecure forms of self-employment,” the report says, referring to adverse effects like poor pension provision.

Older workers, by contrast, were found by the commission to be more likely to be self-employed if they were degree-educated. They tended to be seeking flexible work or an earning boost in the run-up to retirement.

One of the biggest barriers to self-employed people improving their circumstances is poor access to training,” reflected Chris Bryce, chief executive of IPSE.

“Extending tax relief for training to the self-employed will help younger self-employed people gain skills to enable them to progress in their careers. It will also ensure that the UK can extract maximum benefit from its flexible labour market.”

In its report, the commission stops short of making the same recommendation, but it does appear to recognise the underlying issue.

“Of particular concern is the higher share of self-employment at younger ages for those with fewer qualifications,” it said, adding afterwards:

“The Apprenticeship Levy has directed funding to employer-based training, but this funding gap for training not linked to an employer stands out.”

Both the commission’s findings -- and IPSE’s recommendation, coincides with a government consultation on the taxation of self-funded work-related training, open for responses until June 8th.

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