Self-employed tradespeople exposed to unnecessary financial risk

  Posted by: electime      25th June 2019

A large number of the UK’s self-employed tradespeople could be personally exposed to the various risks associated with running a business, exclusive research carried out by self-employment tax specialist, Qdos, has revealed.

The insight suggests that nearly one in three (29 per cent) self-employed workers surveyed do not hold insurance at all, with over half of this group stating they do not believe they need it. This group of workers (83 per cent of whom are sole-traders) do not hold insurance for the following reasons:

●        53 per cent do not think they need it

●        25 per cent believe it’s too expensive

●        17 per cent have never considered it at all

●        8 per cent are looking to buy it

●        1 per cent can’t find the right policy

●        1 per cent say they are self-insured

●        5 per cent stated ‘other’ reasons

Of the 71 per cent of individuals who hold at least one form of insurance, the most common policy is public liability insurance (64 per cent).

Higher earners (£50k+ annual turnover) are more likely to have insurance in place (95 per cent), while those earning under £50k a year are less likely (63 per cent).

Seb Maley, CEO of Qdos, a self-employment insurance provider, commented:

“Self-employed workers are exposed to all kinds of risks on a daily basis – many of which they have no control over and cannot see coming. When running a small business, there’s no escaping the fact that you might have an accident and not be able to work, make a mistake for which you’re liable or even be investigated by the taxman.

“Sole traders do not have the luxury of being protected by their limited company either. This means that if an incident does happen, they will be personally liable should they not hold insurance. Given challenging HMRC, for example, can cost individuals thousands of pounds, the old adage it’s better to be safe than sorry has never been truer.

“For the thousands of tradespeople subcontracting out work, the complexity of the CIS scheme is also something else to consider. HMRC will have no hesitation in fining self-employed workers £3,000 a time should they incorrectly state the employment status of subcontractors on their monthly returns.”