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Sick pay the provision most contractors wish for

Sick pay the provision most contractors wish for

New research released this week has raised a number interesting points about contractors currently working in the UK.

Carried out by cloud accounting software firm FreeAgent and The Freelancer & Contractor Services Association (FCSA), the research covers a number of topics, including what statutory benefit contractors would like, and retirement plans.

In a poll of 900 UK micro-business owners, including personal service company contractors, sick pay was found to be the provision that most self-employed workers would welcome.

This was placed far higher on the wish list than things such as maternity pay, job seekers allowance and pension auto-enrolment.

The research also found that 76% of those polled do not have a way of gaining providing sick pay, maternity or paternity leave, and holiday or redundancy pay within their business.

Interestingly, more than a third of those spoken to did not claim to have plans to help fund their retirement.

Auto-enrolled pensions were also found to not be appealing to many contractors. 22% of respondents said they would opt out of any auto-rolled pension, while 28% said they were unsure what they’d do in this respect.

The research was carried out ahead of the forthcoming of the Taylor review, which is expected in the next few weeks.

This much talked about review of modern employment practices will take a thorough look at what needs to change around the rights of self-employed workers and contractors.

“The UK Government seems determined to ‘level the playing field’ between self-employed and employed workers, but this is actually very unfair on people who run very small businesses, as it does not take into account the huge amount of personal risk that is associated with being self-employed,” said Ed Molyneux, CEO and co-founder of FreeAgent. “Ideally, the UK’s millions of freelancers and micro-business owners should be able to enjoy the same statutory entitlements as their employed counterparts – especially if they will be expected to pay the same level of tax. I therefore hope that the forthcoming Taylor review will be looking closely into this issue, and that the report will make suitable recommendations for how to address the current inequality that exists between employed and self-employed workers.”

Julia Kermode, FCSA’s chief executive added: “For many people who work for themselves, self-employment is a career choice and those who choose it know that this way of working does not come with statutory benefits.  However, it is clear from our research that many have not made appropriate provisions to cover benefits that employees receive. I hope that our evidence helps to inform policy decisions, particularly if the Government intends to increase tax or NICs for self-employed people – as there must be something offered in exchange for increasing the financial burden of the self-employed.  Not all self-employed workers want the same things so there is no one-size fits all solution, in particular those working through their own limited companies are more likely to already have provision for welfare benefits. The Government should find a way of offering additional benefits specifically to those people who want and need them.”