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Nov
2017
Monday 13th
posted by Morning Star in Features

Too little attention has been paid to the additional burden this "reform" will place on self-employed workers, argues CHARLOTTE HUGHES


SELF-EMPLOYED people have always been regarded as the backbone of the British economy, with an approximate 4.7 million self-employed workers registered in the first part of 2016.

Self-employment has helped give people employment opportunities otherwise unavailable to them and part-time self-employed work accounts for more than half of the growth of all employment.

Self-employed people work long hours, preparing for work, submitting work and generally keeping their business running. 
Many work by themselves or are sole traders and therefore have no-one to help them, making the hours that they work long and laborious. 

Many also work for below the minimum wage and have to rely upon working tax credits to top up their income. 

A steady income cannot be depended on as work is often seasonal, paid upon commission etc, and we certainly cannot compare a self-employed sole trader to a self-employed businessperson who has the ability to employ staff.  

Self-employed people are also less able to take time off sick or to take holidays. Time off means that they won’t make any money, which can make self-employment a precarious position to be in at times. This in itself saves the government money. 

These workers provide essential goods and services to their communities, and are often much appreciated by locals. Market stall owners, taxi drivers and childminders are just a few examples. 

People choose to become self-employed for many reasons, ranging from being able to work hours that suit them to fit round family, to provide essential services to the community. 

Self-employed people also play a big part in uniting communities and boosting local and national economies. 

However the Conservative government appears not to see it this way. Part of the universal credit rollout is to completely reform and redesign how self-employment works. 

Under universal credit no allowance is given to the part-time self-employed person working from home, just managing to keep their heads above water. 

They will be regarded as if they are earning the minimum wage, which is £7.50 per hour for 35 hours a week, regardless of whether this is accurate or not. So if you are earning less than this they still regard you as earning this amount. 

If you earn more than the minimum income floor then your actual earnings are taken into account and deducted from the universal credit payment. 

For unearned income — benefits such as child allowance, ESA — that a self-employed person receives there will be a reduction of £1 for every £1 you receive. This income is effectively taken away from you.

The conditions of self-employment state that a person is only allowed to set up one business every five years, although they are supposed to waive the minimum income floor for the first 12 months. 

A self-employed person seeking universal credit is not allowed to have savings of more than £6,000. If they are making a joint claim then their partner’s savings are also taken into account. Any extra savings are regarded as part of their monthly income and therefore are deducted from their universal credit payment. 

To add to the complication, every self-employed person has to supply monthly cash in, cash out figures to the DWP. They will have to send these figures between seven and 14 days after they have sent their previous ones. Failure to do so will result in their universal credit payment being delayed. 

Not only will this be near impossible to complete, there is also the risk of documentation being lost or not being received.  
The system is hardly coping with universal credit as it exists now and this added complication could cause unseen chaos. 

Pressure will be constantly placed on the part-time self-employed person to find more work or to give up their self-employment due to the impossible conditions imposed.

This will affect both local and national economies and high street businesses could shut as a result. 

These changes have the ability to destroy communities and force even more people to chase non-existent jobs and become at the mercy of the universal credit system. 

We owe them more than that and this is why I’m asking the government to rethink its direct attack upon the self-employed. I also hope that the Labour Party will support me with this request. 

 




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