Labour market A tough gig? The nature of self-employment in 21st Century Britain and policy implications 20 February 2017 Daniel Tomlinson Adam Corlett This Resolution Foundation analysis looks at the recent growth in self-employment. It focuses on: the sectoral make-up of the UK’s 5 million self-employed workers; the drivers of this growth since the recession; how the self-employed are treated differently in terms of tax and employment rights; and what policy challenges this raises. Key findings: Nearly 60 per cent of the growth in self-employment since 2009 has been in high-skilled, higher-paying ‘privileged’ sectors, despite them making up just 40 per cent of the self-employed. The fastest growing sectors have been advertising (100 per cent growth), public administration (90 per cent), and banking (60 per cent). The remaining 40 per cent of the growth has taken place in relatively precarious sectors, such as construction and cleaning. One of the key drivers of this growth has been the tax advantages enjoyed by the self-employed. For a worker costing a firm £100,000, a self-employed worker enjoys a tax advantage of around £7,000 over a similarly expensive employee. The growth of self-employment raises important policy questions regarding the tax treatment of labour; employment rights and protection; and access of social security provision and private pension savings.