Freelancers at risk from proposed HMRC legislation, says PCG
The changes, which were first announced in the Chancellor’s Autumn Statement on 5th December, are designed to protect access to employee rights such as the national minimum wage and statutory payments such as sick pay. Following the statement, HMRC had indicated this would have no adverse impact on many of the UK’s 1.72m freelancers. But according to Chris Bryce, PCG’s Chief Executive, if the wording in yesterday’s consultation document remains unchanged, this could result in agencies finding it impossible to do business with independent freelancers.
“We fear that if these plans are introduced unchallenged it could be devastating for many in the freelance sector. In their current state, the proposed measures risk making it impossible for agencies to do business with independent professionals who provide their services on a freelance basis.
“HMRC did move to assure us prior to release of the consultation that the aim of the measures is to target schemes where vulnerable workers are moved to self-employment en-masse when they should be employed. However it appears that they have not considered the commercial ramifications of their proposal.
According to Chris Bryce, although HMRC have stated that & lsquo;the Agency Legislation will not generally apply to [so-called] PSCs’ they have not considered that the burden the new legislation will put on agencies will make them less likely to facilitate work for freelancers.
“HMRC must ensure the definition is watertight so as not to bring freelancers into scope accidentally. It is not helpful that HMRC refer to computer programmers in their consultation when, in fact, the real vulnerable workers are likely to be lower skilled and lower paid.
“It is difficult to comprehend a situation where policy makers would introduce a measure that makes accessing Britain’s most enterprising and entrepreneurial sector all but impossible. With these measures, they risk doing just that. They must recognise the changing face of the labour market and ensure all proposals encourage and encompass the flexibility required in a 21st century economy. Freelancers contribute hugely to that economy and encourage the creation of full-time jobs, these measures could damage both those vital functions.
“The last thing our economy needs at this moment is red tape which directly obstructs the ability of freelancers and their clients to work together. As well as responding robustly to the consultation, PCG will be raising our concerns directly with senior HMRC officials today.”