460,000 workers ‘missing out on employment benefits’

Almost half a million people in the UK could be wrongly working on a self-employed basis, losing out on holiday and sick pay and other employment benefits, says Citizens Advice.

The organisation issued a report on 19 August that suggested up to 460,000 people in the UK whose work had all the characteristics of employment had been classed as self-employed by their employer. It said it had seen a steady increase in the number of people seeking advice on whether or not they were self-employed, describing it as “a growing but mostly hidden problem.”

Senior campaigns officer Alison Blackwood said: “This means the employer avoids their national insurance and any pension contribution, whilst also claiming they do not have to provide basic employment rights. In some cases the employer doesn’t even tell people they’ve been classed as self-employed, and, because the self-employed are usually responsible for their own tax arrangements, this can result in surprise tax demands, often years later.”

Citizens Advice is to launch a campaign highlighting the flexibility, increased control over working lives and other benefits that self-employment offers and calling for more support for people who choose this option.

Ms Blackwood added: “We will also use this campaign to highlight the practice of bogus self-employment and identify the employment rights and responsibilities of individuals.

“We want to make sure that people know the benefits and costs to themselves when they choose genuine self-employment but are not fooled by job offers that have none of these advantages.”

Lara Murray, a specialist in Employment Law at Palmers, said: “Employment status can be confusing and there are sectors where it is a particular problem. The construction union UCATT, for example, estimates that more than half of those working in the industry are falsely self-employed as a result of employers seeking to reduce their tax bill and avoid providing workers with employment benefits. 

“Expert legal advice can help both employers and individuals to clarify employment status issues and can equip workers with the information they need to challenge employers or even take a case to an employment tribunal.

“We understand that many people may be reluctant to approach a solicitor because of fears over the cost, but it is worth checking household and car insurance policies, as these often include cover for legal expenses in disputes over employment issues. For more information, please contact our Employment Law team.”