22 Jan The Gig Economy Revolution: How i4 Empowers Freelancers and Independent Contractors
The gig economy, “a way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately, rather than working for an employer” (Cambridge Dictionary), has been with us since around 2009 and has revolutionised how many of us work. Today, it focuses on digital platforms to connect workers and customers and provides opportunities for a wide variety of people around the country to earn a flexible living or supplement their wages. Here we look at what it means to be a gig economy worker or contractor, and how working through a compliant umbrella company can benefit you.
The make-up of the gig economy:
In 2023 The Chartered Institute of Personnel and Development (CIPD) compiled a report on the gig economy, using data from the Office for National Statistics (ONS) Labour Force Survey which gives some interesting insight into the make-up of the gig economy.
It found that just under 500,000 people worked as gig workers – that’s 1.4% of the total workforce of the UK. Of these, 10% (50,000) people worked as private hire drivers or food delivery drivers. 250,000 people (almost half of gig workers) perform ‘desk-based’ services, working as web developers, and translators or performing remote office work. There are almost 100,000 people doing work such as dog walking painting and decorating, cleaning, plumbing or electrical work, and other manual work as well as being employed in the hospitality, healthcare and social care, in the IT industries, in education or as veterinary contractors.
The reason that many people have adopted this type of work is due to its flexibility – gig workers enjoy greater autonomy than ‘traditional workers’ with the same skills, they can take time off for family or personal reasons, they can determine their working hours, and they can choose precisely which jobs they undertake.
Annual income varies hugely for gig workers and ranges from £250 to over £100,000. Gig workers contribute £20 billion to the UK economy and some estimate that it will grow to over £63 billion by 2026.
Almost three-quarters of people who rely on the gig economy as their main source of income class themselves as self-employed in their main job. However, over recent years there has been some ambiguity about their employment status. The landmark trial, Uber v Aslam, examined whether Uber drivers worked for the company (and were therefore entitled to full employment rights) or were ‘independent contractors’ (which meant that Uber had no obligation to provide workers’ rights). The Supreme Court eventually decided in favour of the drivers, establishing that they should receive full workers’ rights.
However, establishing exactly what employment status a gig worker has can be difficult, and the wrong determination may fall foul of HMRC’s strict off-payroll IR35 rules which try to prevent ‘disguised employment’ and attempts to ensure that everyone pays their fair share of Income Tax and National Insurance Contributions.
This is where a compliant umbrella can help.
Umbrella services for contractors
By becoming an employee of an umbrella company gig workers, or contractors, enjoy full statutory employment rights, including:
- Holiday pay
- Paternity/Maternity pay
- Sick pay
- Workplace pension
What’s more, we’ll ensure that you retain the correct amount of your hard-earned cash, without the need for time-consuming and confusing self-assessment or expensive and elusive accountants. This means that we’ll look after the calculation and deduction of all statutory payments, including Income Tax and National Insurance, to minimise interaction with HMRC and adhere to all their compliance standards.
As an umbrella employee, you’ll also have the benefit of a record of continuous employment across all your contracts, something which is vital if you’re applying for a mortgage or applying for credit facilities.
Our registration process is simple and speedy, allowing you to be paid the very same day as you register. We offer all our contractor employees access to our unique Customer Relationship Management system, including the i4 App, which enables you to check your payslips, submit your timesheets, request holiday pay, view your P60s, and much more.
Finally, we understand that working as a contractor in the gig economy can be isolating, and you can feel that you have no support in matters such as Human Resources, IR35 Status, or how the tax system works. That’s why we offer all of our contractors a dedicated account manager who’s at hand to answer all of your questions. We’ve already helped almost 40,000 people make the most of their freedom and flexibility in undertaking contract work over the last 19 years, and we’d be delighted to welcome you too.
If you’d like more information about how you can compliantly maximise your income whilst enjoying the freedom of contract work call us on 0800 084 3058, email us at firstname.lastname@example.org, or fill in the contact form here.