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NHF Responds to Review of Modern Working Practices

by Matthew Batham / July 13, 2017

The National Hairdressers’ Federation has reacted to publication of the findings of the Review of Modern Working Practices.

The NHF contributed to the findings with the submission of a formal response based on its own survey of more than 500 hair, barbering and beauty business owners and self-employed people working in our industry.

Echoing the NHF survey findings, the Review panel recognised that the majority of self-employed people welcome the flexibility and work-life balance that they get from working for themselves.  But the report warned that employers must not use flexible working simply as a way of reducing costs and urged the government to make sure that flexibility is not at the ‘unreasonable’ expense of the self-employed people who work in those businesses.

The review comes on the back of high profile cases involving companies operating in the ‘gig economy’, such as Uber and Deliveroo whose workers are paid per assignment and are allocated to a job via an IT platform.  The report proposes that the term ‘worker’ is changed to ‘dependent contractor’ to cover people who are not employees but who are not genuinely self-employed either.

Other recommendations included:

  • Greater and fairer enforcement aimed at curbing ‘cash in hand’ payments which cost the UK as much as £6.2bn in lost tax revenue
  • Introducing auto-enrolment for the self-employed to encourage them to save for retirement

Hilary Hall, NHF chief executive, said, “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 salon owners who employ their staff will have to charge 20% extra just to cover VAT.

“It’s far too early to tell what impact these recommendations will have on self-employment in the hairdressing, barbering and beauty industries, particularly chair renting.  The government will have to decide which of those recommendations they want to accept and then whether changes to legislation or tax policy will be needed, so it could be some time before we know how the government will respond.

“In the meantime, we urge business owners to have proper NHF chair renting or beauty room agreements in place which, under current legislation, are designed to remove the risk of HMRC deciding that your self-employed workers are really employees which leaves you wide open to tax penalties and expensive legal action.”

 

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