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Article

14 Feb 2017

Author:
Trade Union Congress

UK: Gig economy sees rise in precarious work & tax shortfall, Trade Union Congress reports

...The report uses tax and benefit modelling to show the impact of the growth in insecure work since 2006. It shows how the growth of low-paid self-employment and zero-hours contracts has led to a fall in government revenues because: Low-paid self-employed workers and those on zero-hours contracts earn significantly less than regular employees and therefore pay less tax and national insurance; this also makes them more likely to need to rely on in-work benefits such as tax credits and housing benefit; even when the self-employed do earn as much as regular employees, the tax is structured so that they pay less. This has led to a lower tax take and higher spending on in-work benefits. The report says that the total being lost to the Treasury from the rise in precarious working is more than £75m a week. This is the equivalent of more than a quarter of England’s social care budget...TUC General Secretary Frances O’Grady said: “The huge rise in insecure work isn’t just bad for workers. It’s punching a massive hole in the public finances too...Bosses who employ staff on shady contracts are cheating all of us. That’s why we desperately need more decent jobs that pay a fair wage. Getting more people into unions is key. Workers in unionised workplaces are twice as likely to be on better-paid secure contracts.”