As a self-employed project manager for 20 years I can see from comments in the media from both politicians (Reports, 10 March) and journalists that many assume that the self-employed are paid at the same rate as the employee for the equivalent job. In general they are not. They charge more for their time to compensate for the lack of employee benefits.
I have given work to hundreds of self-employed staff across the UK, on projects at both the high end of the market in IT and at the lower end in construction.
In IT the self-employed are paid typically £300-£1,000 per day depending on grade, broadly double their counterparts in employment.
In the skilled trades, self-employed rates are generally £20–£30 per hour in the north (£30-£60 in London); however, they earn considerably more in fixed-price projects if they work quickly. This can be anywhere from 50% to 100% more than their counterparts. So, we are more than adequately compensated for our loss of employment benefits and I think most of us wouldn’t really object to paying our fair share towards the NHS etc.
One last point for Tory backbenchers: the self-employed are not entrepreneurs starting up new businesses. In the main we are quite happy working as individuals without the responsibility of employing people. Those entrepreneurs who start up businesses as limited companies and employ people usually pay themselves via dividends and therefore pay no national insurance contributions at all, or only a minimum amount if they have a very small salary.
Malton, North Yorkshire
• Having left the BBC in 1975 to move out of London, I eventually stumbled back into the film and TV industry’s uncertain freelance world, often single-day engagements, which resulted in a list of “employers” as long as your arm. But had I insisted on being regarded as an employee, with the concomitant extra paperwork for the “employer” and the cost of holiday, sick pay and pension entitlement, I would have starved.
Then Mrs Thatcher passed legislation aimed at destroying “the lump” in the building industry (where people were often paid lump sums without deductions for tax). I had a futile, though lengthy and costly, exchange with the Inland Revenue resulting from its impossible demand for details of my income and “employers” for the previous eight years. Impossible, due in large part to the time period, the sheer number of companies and their avoidance of documentation.
This was an acrimonious, lengthy and costly process. So, in a mixture of Catch-22 and Kafka, the HMRC saw me as an employee but most TV production outfits saw me as self-employed; others ostensibly recognised me as an employee but actually treated me as self-employed: no tax or national insurance deductions; no employee rights. In addition, companies invariably required that my base was wherever they happened to be based, thus denying me any rights to claim travel or subsistence expenses when working away from home, which was always.
Later, the various grades in the film business were categorised as either self-employed or employed, and companies were obliged to operate within the new rules, under constant surveillance of the HMRC. My guess is that more time was spent on this than in the recovery of unpaid/evaded tax from millionaires.
The self-employed today are predominantly those encouraged to leave “the dole” to improve the unemployment figures, but in the way that Tory governments toy with people’s lives, they are now being penalised: increased NIC without the holiday, sick pay and pension entitlements available to employees. It’s a relief to be retired.
Bury St Edmunds, Suffolk
• I am not self-employed by choice, but pick up bits of work from companies where there isn’t a whole job, or to do things they don’t want to do themselves. If they cancel a week’s work with no notice, there is nothing we can do about it. If we are sick, we don’t get paid. If a client moves important work, we cancel a booked holiday. If we are out of work with no income, our reduced NI means the government will not help. Thank you, Philip Hammond, for finding a new group to bully.
• True to form, a Tory chancellor has targeted his tax-seeking missile on the poor while continuing tax relief for those in higher earnings brackets. By removing the secondary threshold for national insurance Philip Hammond could, according to his own figures, raise £28bn from those earning above £40,000. This would provide a substantial boost to the public finances without creating a disincentive to creating a new business.
Molly Scott Cato
Green MEP for South West England and Gibraltar
• No crocodile tears for the self-employed, please (Opinion, 10 March). They are no more indispensable than full-time PAYE-paying employees. All organisations require, at the very least, a core of loyal full-time employees. Imagine the NHS and the education sector staffed entirely by freelancers in order to avoid the employer’s NIC contribution of 13.8% on annual earnings above £7,488. Chaos would ensue.
The trend towards self-employment, with its accompanying erosion of the tax base, will continue unless the tax advantages of the self-employed are curtailed. Those who object should tell us how they would make up the shortfall.
Winterborne Houghton, Dorset
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