Articles - 4th March 2020

How is Coronavirus going to affect gig economy workers?

Words by The UP team

​Coronavirus UK: unions warn over lack of sick pay for gig economy workers (The Guardian)

The government has been accused of failing to grasp the threat of gig economy workers spreading coronavirus, after a minister advised those with no sick pay who have to self-isolate to claim benefits instead. Downing Street is under huge pressure from trade unions and Labour to promise statutory sick pay to all workers when it unveils its coronavirus action plan, due to be published on Tuesday.

But Justin Tomlinson, a work and pensions minister, said the current advice for workers with no sick pay who suspect they have the disease was to claim universal credit – which can take up to five weeks to come through. The alternative would be employment and support allowance, which requires claimants to have two to three years of National Insurance contributions.

Sue Harris, GMB legal director, added: “For workers, or the self-employed, making a claim for universal credit is laborious and lengthy. If the government is serious about containing the virus it has to take steps to make sure people are able to self-isolate without the added concern of how they will pay their bills.”

A Downing Street source said the government was thinking about how to deal with the problem, hinting that there could be more support for those with no sick pay announced soon. But in a parliamentary answer on Monday, Tomlinson told Labour MP Alex Sobel that the current advice for gig economy and agency workers was to turn to the welfare system.



UK adopts ‘light touch’ on tax rules for freelance contractors (Financial Times)

Businesses will be absolved of penalties if they incorrectly assess the status of freelance contractors in the first year of changes to UK tax rules, under a “light touch” approach outlined by the government. The Treasury has bowed to pressure from businesses and freelance groups who have railed against the impact of changes to the IR35 rules in April when hiring companies become responsible for determining the tax status of “off-payroll” workers employed via limited companies.

In a report, it reinforced statements by chancellor Rishi Sunak, who attempted to reassure business groups that HM Revenue & Customs would not be “heavy-handed” in its implementation of private sector reforms to ensure the transition was “as seamless as possible”. Implementation of the reforms will proceed on April 6 despite strong opposition, the report said. The review also underlined that any changes to how contractors were taxed would not be applied retroactively to previous tax years unless there was suspicion of fraud or criminal activity.

However, the review was criticised for making most concessions to big companies and not addressing concerns that it will unfairly affect self-employed contractors, who will lose control of their tax determination to the companies they work with. The Treasury acknowledged the significant growth of self-employment and owner-managers in the UK in recent years, but said non-compliance with off-payroll tax rules was widespread and repeated the forecast that if the rules were not changed, non-compliance would cost the government £1.3bn annually by 2023.

HMRC estimates that only one in 10 contractors in the private sector who should be paying tax under the current rules is doing so correctly. HMRC also said on Thursday the government would introduce a legal obligation on organisations to respond to requested information about their size “to make it clearer who is responsible for determining the worker’s tax status”.


Self-employment boom fuels £17bn UK ‘shed’ economy (The Scotsman)

A study by digital bank Starling found a growing number of home-based workers are moving into workspaces in the garden where they’re more likely to get peace and quiet. Almost one in three sole traders and micro-business owners in Scotland work from premises in their garden, either occasionally, regularly or full time.

Among Scottish “shed-preneurs”, the most commonly cited benefit is peace and quiet, with 54 per cent highlighting it. Other pluses identified include being more productive (38 per cent), being able to spend time with pets (23 per cent) and juggling family life with running a business (24 per cent).

The survey found full-time shed-workers are also four times less likely to be stressed at work than other self-employed people, more likely to feel they have a good work-life balance and are also more likely to be confident about their businesses’ prospects.

Latest figures show there are 306,000 self-employed people in Scotland, representing 12.4 per cent of the workforce and an increase of 41 per cent since 2008.


90% of UK Freelancers and Small Business Owners Would Use All-Digital Bank Instead of Traditional Banking Services (Crowdfund Insider)

Approximately 90% of small business owners and freelance workers in the UK say they might prefer using an all-digital bank, instead of a traditional brick-and-mortar bank. This, according to a new study published by research firm Capterra.

The study revealed that although 23% of survey respondents have a digital bank as their main account, 77% of the remaining respondents that were using a regular bank said they might begin using a digital bank. Capterra’s research study surveyed 607 freelancers and small business owners. It revealed that 57% of survey respondents had a mobile banking app, and 82% felt that banks should have a physical branch.


Self-isolation is a luxury that gig economy workers can ill afford (The Guardian)

The government’s advice to self-isolate seems tone-deaf to the reality of many British workers. Precarious work, where employees can’t afford to take sick days for fear of losing their wages, impedes what is needed most when containing a pandemic: acting with other people in mind. This is why public health policies must place the interests of the least well-off at their centre.

Britain’s gig economy has more than doubled over the past three years and now accounts for some 4.7 million workers. As the nine-to-five job has been dismantled, so have workers’ rights: according to research from the New Economics Foundation, one in six UK workers are now in low-paid, insecure jobs where many lack protections afforded to permanent workers such as sick pay. When it comes to public health, these precarious working conditions are a major weakness in the government’s capacity to prevent the transmission of infection and disease.


‘Outrageous’: Government tells ‘gig economy’ workers to claim universal credit if coronavirus forces them to stay at home (The Independent)

Gig economy workers forced to stay home because of coronavirus will be told to claim universal credit to make up for their lost wages, in a move seen as “outrageous”. It would involve a wait of up to five weeks for payments to come through for staff – often on zero-hours contracts – with no sick pay, who suspect they have the disease.

The other option is to move onto employment and support allowance, but that requires claimants to have up to three years of National Insurance contributions. The stance set out by the department for work and pensions (DWP) came as Boris Johnson insisted he was “well aware of the issue” – but set out no other possible help for gig economy workers.



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