We all know the gig economy is becoming popular among contractors. However, a key advisor to the prime minister doesn’t like it at all.
Matthew Taylor, who is currently the future of work advisor to Theresa May has gone on record to say that the current gig economy is going to cost the government billions of pounds over the next few years, mainly because it means contractors and self employed people in general will be paying around £2000 less in tax a year.
How has he come up with this figure you might be wondering? It all comes down to companies such as Deliveroo and Uber, where many of the freelance contractors who work for these companies pay, on average, less tax than someone who is employed and earns the same amount of money per year.
This is no doubt why people, including many in the government, are questioning the employment status of workers in the gig economy, and saying that many times someone who is self employed should actually be employed.
Well, if they pay more tax then of course you are going to say that, as it means more money for the government.
If there is one thing the government doesn’t like it is losing out on money, and that is why I think we are going to be hearing more about the gig economy and the worker status of contractors and self employed.
We’ve already seen how the taxi app Uber have come under scrutiny recently, most notably where a judge decided that some of the freelance contractors working for them should be classified as employees instead.
Recent figures show that Uber now have 40,000 self employed drivers in the UK, but it makes you wonder how long they are going to remain this way.
I’m sure if Matthew Taylor or other people in the government have anything to do with it then it won’t be long until we see the vast majority, or even all of the drivers become employees, even if this isn’t what the drivers themselves want.
Interestingly, this is coming at a time when many well known retailers and companies are now starting to adopt the Uber style self employment model. Are they wasting their time though? Especially when so many people in power seem to want an end to this kind of gig economy.
Who knows, if it turns out that most people want to become a freelance contractor in a gig economy instead of an employee and they make their voice heard, then surely the government will have to stand up and take notice.