Executive Summary
The PCSO (Professional Contractors Services Organisation) supports and promotes Professional Contracting (independent professionals or “iPros”). Its members have over fifteen years experience in the sector, and currently provide services to over 6,000 iPros. This submission has been prepared in light of the ongoing debate on the “Gig Economy” including the current public consultation on flexible working.
The Government has clearly signalled the need to prepare for approaching challenges, particularly a slowdown in global growth and Brexit, in its publication “Future Jobs Ireland 2019”. Given the timeline for Brexit, there is now an urgent need for action to enhance the enterprise culture of our workforce, in anticipation of the inevitable post-Brexit disruption, recognising that large-scale permanent employment is not going to be available as a solution.
We fully appreciate the need to address the potential exploitation in what is called “bogus self-employment”. Unfortunately, the steps being taken to address this are having negative effects on the legitimate enterprise of professionals who choose to operate their own service businesses. They need clarity and certainty that they are recognised as businesses, and are not unwillingly deemed “employees”, for either tax or social protection purposes. Uncertainty has, we believe, contributed to the decline in self-employment in recent years.
We propose a clear distinction between those conducting a professional business and others who work on short-term or part-time contracts. This would make it easier for individuals to engage in entrepreneurial activity, and for client companies to support it.
- Recognise that professionals undertaking contracts for service are operating a Professional Business, and are entitled to be treated accordingly.
- Equalise tax treatment of costs so that contractors are on a similar footing to employees and other service providers.
- Clarify the employment status of iPros by basing their status on their overall business rather than on each individual contract.
- Allow the sequestering of part of the earnings of Professional Businesses to a business development fund, notwithstanding the provisions relating to close companies, subject to qualifying conditions and restrictions.
These proposals focus on distinguishing professionals conducting a business from persons in employment (or multiple employments). It is necessary to formalise the concept of “Professional Business”, which already exists de facto for professionals such as lawyers, accountants and doctors among others. Ideally, the definition should be enshrined in TCA 1997, but could be implemented by code of practice or guideline.
Flexible working arrangements, including short-term, part-time and temporary contracts, are an established and growing feature of work everywhere, for many reasons. A very important part of that trend is the desire by skilled and entrepreneurial individuals to offer their services to the marketplace as iPros. These individuals provide the “spark” for competitiveness and adaptability in the economy and encouraging them can provide a vital antidote to the disruption we face over the next few years.
We are confident that the measures proposed are reasonable, have a negligible fiscal impact, and will lead to greater confidence among professionals that offering their services as independent business owners is a viable option.
We recognise that this is a summary treatment of the questions addressed, and are available at all times to discuss them in detail.
