For many years, entrepreneurs who wanted to run their own business started up a self-employment and began the risky business of not knowing where their next pay cheque was going to come from. In exchange for taking those risks, entrepreneurs enjoyed tax breaks not available to those in employment. Whilst on the one hand you may not make enough to live off, there is often no real ceiling to how much you can earn. People joined the self-employed ranks in an effort to earn more money.

Since then, entrepreneurs have become more sophisticated, often trading through limited companies and widening the tax planning opportunities that such a structure brings. It hasn’t been all plain sailing though, with the amount of red tape introduced, particularly since we have been part of the EU, often strangling the entrepreneurial spirit.

More recently, the tax benefits have become the driver for ‘entrepreneurs’ starting up in business and it has seen a proliferation of people registering as self-employed or forming their own companies. Those decisions were made by the individuals themselves, who have enjoyed the tax savings they sought for a generation or more. The government has begun a fight back against what it sees as a loss of tax revenue amongst the community of the self-employed and those running personal service companies.

A group of people doing low-paid work on a piecemeal basis

Recent legislation restricting the tax benefits of ‘off payroll workers’ and those drawing dividends from their companies has made these structures less attractive, some would argue for the better. I take issue with that, as these entrepreneurs employ millions of people nationwide, which would not be the case if there were no incentives for them taking the risk of obtaining the business levels that they need.

The latest group of people involved in this debate are those working in what has become known as the ‘gig economy’. There is no dictionary definition, but the term is generally applied to the group of people who are doing low-paid work on a piecemeal basis, often through a website or app. Uber and Deliveroo are just two of the household names using workers in this way. The gig economy has grown rapidly in recent years and estimates suggest that there are over 1.5 million already in this community.

There is a key difference here, however. The workers haven’t generally made the decision to operate in this way; Uber and Deliveroo insist that it’s the only way in which they will do business. There have been high profile challenges to these arrangements and it’s a subject that we will hear more of over the next couple of years whilst the government and the courts try to determine what’s right and wrong.