26 September 2017
The NHBF was a guest at an influential ‘round table’ meeting with Margot James, the Minister for Small Business, Consumers and Corporate Responsibility earlier this month. The meeting was to get views from key stakeholders on how the government should respond to the Taylor Review of Modern Working Practices.
What did the Review identify?
The Review identified that businesses relying on self-employed labour have a significant market advantage over those who employ their staff and noted that this was becoming the norm in some sectors. The NHBF’s 2016 Industry Statistics showed that self-employment is a growing trend with 48% of people working in hairdressing and barbering and 57% of people working in beauty classing themselves as self-employed.
As well as the ever-increasing employment costs they bear such as National Insurance Contributions and pension contributions, businesses with employees are also more likely to be above the £85,000 VAT threshold and therefore having to charge - and pay - VAT.
To address these inequalities, the NHBF has called on the Minister to level the playing field by:
- Increasing National Insurance Contributions for the self-employed people working in salons or barbershops to the same level as those paid by employers for their staff
- Reducing VAT from 20% to 5%, while at the same time lowering the VAT threshold from £85,000 to £40,000 or less. This would ensure that more businesses, including the self-employed, would pay VAT but at a much lower rate
- Ensure the self-employed are better protected by introducing the new ‘dependent contractor’ status recommended by the Review, backed up by a written statement of their rights.
The NHBF’s chief executive, Hilary Hall said, “Dependent contractor status is likely to apply to the self-employed working in salons or barbershops. The NHBF’s highly successful chair renting agreements already provide a clear statement of rights and responsibilities, not only for self-employed workers but also for the business owner, providing a perfect blueprint for the future.”
- Please view the NHBF’s 2016 industry stats here
- You can also view the NHBF’s self-employment survey results (which informed our response to the Review of Modern Working Practices) here