Government accused of neglecting freelancer training

Monday 24 November 2014

An independent report has criticised the government for neglecting freelancers, such as umbrella company contractors, limited company contractors and sole traders, with calls to include appropriate training for self-employed workers to be included in government policy.

The Skills Commission has made such claims, with the report released before National Freelancers Day on November 19th.

The organisation, featuring leading figures from the education sector, suggested there are not enough incentives to train freelancers. Ensuring that self-employed workers receive the support and additional skills they need could help to provide a significant boost to the economy, the report claimed.

According to the Skills Commision, one of the major disincentives for additional training for freelancers is certain intricacies in tax rules, with HM Revenue & Customs (HMRC) using training given by an organisation to a self-employed worker as evidence of their “employment status”. This is especially discouraging for freelancers who already struggle with following strict, complicated and often unnecessary rules on taxation for freelancers and contractors.

Furthermore, this also creates taxation issues for training providers, as the costs associated with a working relationship with freelancers is something companies that offer training schemes wish to avoid.

Speaking of the report, inquiry co-chair Dame Ruth Silver said: “We need significant and cultural changes to occur if we are to ensure that the UK workforce is equipped with the skills the UK economy needs. But this shift cannot be achieved by focusing on individual components of the system in isolation from each other.”

In the report, the Skills Commission suggested that HMRC should “re-examine” various stipulations in current tax rules that prevent or discourage freelancers from taking advantage of extra training opportunities.

“Structures and incentives… [must then be] put in place to support individuals in investing in their own skills development,” the report read.

The employment market is changing, as is the way people chose to work, and it seems the government has yet to fully embrace highly skilled, self-employed professionals, despite recent figures suggesting there are an estimated 4.6 million freelancers in the UK today.

“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,” the report continued.

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

Freelancers’ trade group IPSE has welcomed the report, with the organisation also noting the distinct lack of support when it comes to training for self-employed individuals.


The group’s policy development manager George Anastasi said the Skills Commissions’ efforts are “encouraging” as the calls for disincentives to be removed begin to get louder among the freelance workforce.

“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,” he continued.

It is taxation issues that put off many workers from taking the plunge into freelance life. While the flexible nature of employment is desirable and control of your own destiny is also key to job satisfaction, the issues associated with self assessment and unclear rules set out by HMRC often prevent people becoming self-employed.

Making use of a contractor services company that helps with accountancy issues and tax concerns can be a real help for freelancers, allowing them to continue working without the worry of falling foul of HMRC.

By Victoria McDonnell

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