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News - 23 February 2015

Self-employed status rules to be investigated

Business secretary Vince Cable says the government will investigate the use of self-employed status by businesses, after more than 1,000 drivers were left without compensation when courier firm City Link went into administration.

The Government will review the wider implications for self-employed individuals and firms who use this type of contractual arrangement. Announcing the investigation, Vince Cable said:

"There are people in the category who are genuinely entrepreneurial. But many are in a very precarious situation, working for one employer, and that degrades their employment... we have got a very good entrepreneurial culture, but there is a dark side to that too."

When 45-year-old nationwide courier business City Link went into administration at Christmas, more than 3,000 people were made redundant. More than a third of them had become self-employed after the firm was taken over by private equity owners, meaning they are not entitled to redundancy payments or back pay. The RMT union says they were “forced” to take on self-employed status, which City Link’s owners deny.

Lavinia Newman, Founder of ABDS and a qualified Mediator comments:
“The legal definition of self-employment involves people providing their own equipment and being able to work for a variety of businesses. But in the courier delivery sector, where the majority of firms make widespread use of self-employment, drivers use liveried vans which they ‘hire’ from their employers.”

In its publication, People Management, The Chartered Institute for Personnel and Development (CIPD) says that 15 per cent of the UK workforce is now self-employed, though the reasons for the rapid recent increase in self-employment is unclear.

For those who are looking for a more personal approach on a range of individual and business related issues, contact us at ABDS.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals

Helping Your Business is Our Business

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