The current state of self-employment is far from what it once was. Today you are just as likely to see a blue collar worker who is defined as ‘self-employed’ as you are a skilled contractor. The number of workers now considered ‘self-employed’ reflects this shift: 4.8 million now fall into the category. A study from the Office of National Statistics found that part-time self-Employment grew by 88% between 2001 and 2015, whilst full-time self-employment grew by 25% in the same period.

The changing face of employment

For some, these figures show a desire from UK employees to take back control of their working schedules and to control their own earnings.

Unfortunately, those earnings don’t make for particularly encouraging reading: according to Accounting Technician magazine, 2014-15 saw self-employed people earn on average £240-a-week; that’s £60 less than their counterparts were earning in 1994-95.

The shift, therefore, appears to have been towards low end or unskilled work. As Accounting Technician magazine comments, "more businesses have sprung up that take advantage of self-employed contractors." Through the use of contractors, businesses avoid having to pay the national insurance (NI) contributions they would if the worker was contractually registered with the company. The more self-employed workers you have, the more money you save through avoided NI contributions.

An investigation by the Guardian, however, demonstrated that this new model of employment is also being used in academia. While university tuition fees rise up to £9,000-per-year, the ‘richest Russell Group institutions’ are relying most heavily on gig academics. Contrary to the thoughts of Ian Brinkley (chief economist at the Chartered Institute of Personnel and Development), white collar professions are also starting to see a level of instability in their self-employed positions.

Could court cases decide the fate of the self-employed?

As this is a relatively new form of payment for employment, the rules are still being formulated, often through court battles. Uber, Deliveroo and Pimlico Plumbers have all faced legal challenges from their contractors. The results of the Court Cases could very well determine the rights of self-employed workers for years to come.

If the workload is balanced correctly and tax calculations are planned accordingly, self-employment can offer a real alternative to traditional contract employment. Those who are savvy with taxing will also recognise the host of deduction possibilities available to self-employed workers.

Those interested in learning how to benefit from the full tax deductions that come with being self-employed should get in contact with the UK College of Business and Computing today. The UKCBC offers Association of Accounting Technician (AAT) qualifications from in and around the London area.