The UK has seen a rise in the gig economy over the past decade, with more and more people making the switch from traditional full-time employment to a range of alternative, flexible types of work such as freelance, temporary, and part-time self-employment. As the gig economy continues to grow, it’s important for workers to understand what it means and how to successfully navigate this new way of working.
What is the gig economy?
The gig economy is a way of working in which work is organised around short contracts, rather than traditional, long-term, full-time employment. This is often freelance work, where the individual contracts their services or skills to companies, and often works on an ‘as-needed’ basis. There are also other forms of gig work, such as part-time or temporary, self-employment, where individuals can use professional websites to identify work opportunities in fields as wide-ranging as app development and pet-sitting.
Are there Benefits?
One of the main attractions of the gig economy is its flexibility. It allows people to work at times that may better suit them than traditional nine-to-five jobs, and to sometimes tailor their schedules around other commitments. This type of work can be particularly attractive for those with caring responsibilities, or those who are attending university. It also offers a greater variety of different types of work to choose from, and allows experienced professionals to potentially increase their income.
What are the Potential Drawbacks?
However, there can be some risks associated with this type of employment. Generally, gig economy jobs are low-paid and offer little to no job security, meaning that workers may not be guaranteed to be paid for their work if their client cancels. Furthermore, for those unable to make a decent living from such work, it can lead to financial insecurity. Self-employed workers also have to take responsibility for paying their own taxes and contributions to the National Insurance system.
Key Takeaways
- The gig economy is a way of working organised around short contracts
- It can offer greater flexibility and variety of work
- It can also be low-paid and offer little to no job security
- Self-employed workers are responsible for paying their own taxes and contributions to the National Insurance system.
Advice for Gig Economy Workers
For those interested in the gig economy, there are steps that they can take to maximise the potential benefits while protecting themselves from any potential risks:
- Make sure you understand your rights as an employee. The Employment Rights Act covers most workers, regardless of whether they’re employed full-time or in the gig economy.
- Find out what expenses are and are not allowed to be claimed for tax purposes.
- Research the type of work you’ll be doing, and any qualifications or special training you may need.
- Make sure you have a good understanding of how much you’ll be paid for your work, including any out-of-pocket expenses.
- Register as self-employed.
- Find out which tax brackets and deductions you’ll need to consider when submitting your tax return
- Investigate any insurance policies you may need to protect yourself from potential risks.
- Get advice from financial and tax experts if you’re unsure about any of the steps involved in setting up and running your own business.
The gig economy is a growing part of the UK’s labour market, and for those willing to take the plunge, it can be an exciting and rewarding way of working. As with any form of employment, it’s important to research what it entails and make sure you have the right information, advice and support to make it a success.