Workers Switching From Self-Employed To Employed

Nobody needs a DBS certificate to employ themselves, but new data has shown that the total number of Britons who are self-employed has been falling significantly.

Research carried out by the Association of Independent Professionals and the Self-Employed (IPSE), a non-profit support organisation for the self-employed sector, has revealed the number of people in the UK working for themselves has dropped by five per cent from 4.3 million in 2020 to 4.1 million last year.

It is the second year in a row that self-employment has fallen, marking a partial reversal of the relentless upward trend between 2008 and 2019, when the number rose by 40 per cent.

Responding to the news, CEO of IPSE Derek Cribb said it was “worrying” to see successive annual falls in self employed numbers, adding this was particularly so “given the significant contribution the self-employed are known to make in periods of economic recovery”.

He blamed factors such as the uncertainty of Brexit, the economic pressures of the pandemic and the imposition of the new IR35 tax regime as being factors driving people out of self-employed work.

What is clearly not a cause of reduced self-employment is unemployment. While many self-employed businesses will fail, it doesn’t mean their owners swiftly end up on benefits; While the self-employed numbers have fallen, the number in employment in December 2021 was 184,000 higher than in November and 409,000 more than in February 2020, the last ‘pre-pandemic’ month.

Alongside these official government figures were some particularly notable facts: while redundancies were at an all-time low (albeit after a September spike coinciding with the end of furlough), the number of vacancies stood at 1,247,000 in December 2021, the highest figure on record.

So with more people in work, unemployment down (it fell by 0.4 per cent over the last three months of 2021) and more vacancies than ever, the likeliest destination for those leaving self-employment has been a shift to working for someone else.

All this means that employment verification checks may be getting used more and more, not least because the lack of a previous recent employer means it will not be possible to confirm that a previous employer had carried out similar checks. Indeed, if someone has been working for themselves, by definition they are less likely to have undergone such a check in the recent past.

How often this may happen could be hard to gauge; the IPSE survey noted which sectors had lost the most self-employed workers, such as a 14 per cent drop in those working in arts, media and literature. However, this does not track whether those leaving self-employed roles in this sector are moving into something similar for an employer, or switching to careers in other sectors.

In addition, it should be noted there are sectors of self-employment that are growing – such as HGV driving – and also some parts of the UK where self-employment has risen, especially Wales (up 30 per cent).

Nonetheless, the sheer arithmetic of rising employment and falling self-employment means this kind of switching must be taking place on a significant scale, meaning more people will be working in roles where they need some form of employment check before they can start.

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