The number of flexibly- and self-employed workers has increased significantly in recent decades. At the end of 2016, nearly five million UK workers were classified as self-employed, which marks a 45% rise since 2000. The gig economy covers all sectors; not just the likes of Uber drivers or Airbnb hosts, but a considerable amount of highly skilled workers, such as IT experts and computer programmers.
The gig economy gives workers an enviable opportunity to work flexibly and be selective about their jobs. But with this territory comes specific risks and challenges that go beyond worrying when your next paycheck will come in. Therefore it is vital that you understand what support you are going to need when you set out.
Freelancers and contractors need accountants
Despite the government’s recent u-turn on an increase to national insurance contributions for the self-employed, workers in the gig economy still face considerably more hassle when it comes to tax and finances than the full-time employed.
The specifics and nuances involved with filing self assessment tax returns on freelance work can be overwhelming, even for the most experienced gig economy workers. Accounting tech tools like QuickBooks are certainly useful, but freelancers, contractors and the self-employed should not be under the illusion that they are sufficient. These online apps can help you do a good amount of work yourself, but are no substitute for advice from a professional.
Fusion Accountants, based in London, Hounslow and Kingston offer accounting services for sole traders and small businesses on a rolling monthly contract. 3 Wise Bears is a London-based firm, specialising in cloud-based accounting for contractors, freelancers and the self-employed. As well as offering accounting and invoicing tools which are easily accessible for workers without permanent office space, these accountancy firms offer professional advice and guidance. This helps gig economy workers determine what deductions they are entitled to, and what kind of records freelancers, contractors and the self-employed ought to be maintaining in order to deduct those expenses.
Freelancers and contractors need insurance
Taking up a career as a freelancer or contractor isn’t necessarily all that liberating. As an independent worker you are, for all intents and purposes, a small business. That means you have the same responsibilities when it comes to covering your professional property and your own back.
General liability insurance protects you, as a small business, if your clients or members of the public suffer personal injury or property damage as a result of your business practices in your own office or a client’s. The insurance, recommended for individuals and businesses across all sectors, covers the cost of subsequent legal expenses or compensation claims against you.
Professional liability insurance, sometimes called Error and Omissions Coverage, is also an essential for freelancers with regards to your contracted deliverables. This insurance can protect you against claims that you incorrectly provided a contracted service, or if the work you did for a client was faulty in some way.
It’s not just your business activities that need insuring. Even freelancers and contractors who work from home are not always covered by personal household insurance, so you may require separate equipment insurance. As a freelancer or contractor, your ‘employer’ (that’s you) should also take responsibility for medical, personal injury and income protection insurance.
Freelancers and contractors need a network
Freelance Alliance helps freelancers with one of their top needs: finding work. An online marketplace of sorts, businesses and clients can connect with the freelancers and contractors they seek. Platforms like these offer freelancers an essential service that might otherwise go amiss: marketing. Creating a profile on a site like this, complete with a portfolio and proof of their credentials, helps connect freelancers with clients needing their services. The more work a freelancer gets, the more they earn.
Ensuring a successful career in the gig economy isn’t just about standing out from the crowd, it’s about being part of that crowd too. In the US, Uber is about to launch a bold experiment, encouraging its 35,000 drivers in the city of New York to form an Independent Drivers Guild to promote a collective dialogue and limited worker protections. It marks an acknowledgement from company bosses that freelancing workers need to feel a little more secure.
This significant move towards unionisation (though the leaders of Uber are rather disinclined to call it that) is something often lacking among sectors of the gig economy, leaving workers vulnerable to exploitation, as the UK’s Deliveroo riders claimed last year. Unionisation, as well as securing freelance and contracted workers’ rights also facilitates flexible learning and training systems to enable people in the gig economy to develop their skills.
So working in the gig economy isn’t all rock n’ roll, but there are plenty of options for support. In the UK, opportunities for freelancers to shore up their protection comes in the form of organisations like the National Union of Journalists or the BECTU freelance branch. Freelance UK also offer support and guidance for creative freelancers. An association of professional freelancers, contractors and the self-employed, IPSE works to give all workers the freedom to build meaningful, connected, and independent careers. Consulting or joining an organisation like these ensures you, and your business, are backed by a system of both mutual and policy support.