NHF calls for greater employment equality

The NHF has called for a level playing field when it comes to employment versus self-employment, in response to the recently government-commissioned Review of Modern Working Practices. Within the review, the differences in National Insurance Contributions were held up as a particularly biting example of the inequalities between the two forms of employment. An employee pays NICs at 12% and the employer pays 13.8% on top – but a self-employed person pays NICs only at 9% while the business owner pays nothing at all.

“Although we welcome the report’s focus on inequalities in the tax system, especially National Insurance Contributions, it overlooked important differences in VAT.  Self-employed people are likely to be under the VAT threshold whereas shop owners who employ their staff will have to charge 20% extra just to cover VAT,” says Hilary Hall, NHF chief executive.

The independent review also warned that employers must not use flexible working simply as a way of reducing costs and undercutting prices and it also urged the government to make sure that flexibility is not at the ‘unreasonable’ expense of the self-employed people who work in those businesses. It called for greater powers to curb ‘cash in hand’ payments which cost the UK as much as £6.2 billion in lost tax revenue.

Hillary went on to say that it’s far too early to tell what impact these recommendations will have on self-employment in the barbering industry but urged shop owners to have proper NHF chair renting agreements in place which help to remove the risk of HMRC deciding that your self-employed workers are really employees, potentially leaving you with tax penalties and expensive legal action.

For more help and advice visit www.nhf.info or read the full Review of Modern Working Practices.