Last month, new data on the U.K.’s gig economy surfaced from the University of Hertfordshire, concluding that the number of gig workers in Britain has more than doubled in the last three years, now reaching 4.7 million professionals.
Experts say the explosion of technology platforms like Uber and Deliveroo ushered in waves of opportunity for professionals to have greater control over when, where and how they work. The U.K.’s Trades Union Congress, however, sees this surge in gig workers from a different angle.
“The world of work is changing fast and working people don’t have the protection they need,” said Frances O’Grady, Trades Union Congress general secretary, in an interview with The Guardian in June. “Huge numbers are being forced to take on casual and insecure platform work — often on top of other jobs.”
Whether out of choice or out of necessity, gig work is on the rise, and with it comes a slew of new challenges for this growing population of professionals — most notably, a lack of time and resources available to larger, more traditional businesses.
According to Billel Ridelle, founder and CEO of newly-launched U.K. expense management platform Sweep, professionals like gig workers, freelancers and the smallest of the SMBs are being left out of the T&E solutions market because they lack those resources.
“Small businesses today end up with a large number of tools not tailored to their specific needs,” he told PYMNTS in a recent interview. “They’re either too complex in terms of technology, and hard to implement, or the pricing structure is too complicated for them to make sense of it and on-board.”
That “systematic” avoidance of small businesses and independent workers leaves them forced to rely on solutions that still require manual intervention. Ridelle pointed to the task of sifting through paper receipts to manually enter in expense data — a process a larger business might allocate to administrative workers — that keeps business owners and entrepreneurs from focusing on the true objectives of their firms.
On top of that administrative burden, the growing gig worker population in the U.K. is facing heightened compliance burdens that similarly force administrative, manual tasks on professionals that need that time to focus on their businesses. Regulatory initiatives like Making Tax Digital, which requires taxpayers to send HMRC income and expenditure summaries on a quarterly basis and in a digital format, can place a significant burden on gig workers and freelancers, said Ridelle.
“Having the ability to report taxes correctly all comes down to the fact that you need to have your expenses sorted correctly from the get-go,” he said. “HMRC doesn’t allow for mistakes, and that can cost you a lot of money when you freelance and have even more limited resources than an [SMB].”
The U.K. is considering a way to simplify taxes for gig workers by enabling technology platforms that hire these professionals to automatically deduct taxes - a move proponents say will ease the compliance burden on gig workers, but, according to the Office of Tax Simplification, could further blur the lines between self-employed and employed professionals, raising some concern that it would complicate the tax status of gig economy professionals currently considered self-employed, Financial Times reports said last year.
Focusing On Integration
The U.K. regulatory landscape has, however, opened up an opportunity for gig workers, freelancers, and businesses of all sizes to take a different approach to expense management.
Ridelle said that PSD2 and GDPR allow for solution providers like Sweep to integrate directly into those businesses’ bank feeds to collect expense data, analyze it, and report it appropriately, instead of requiring users to handle physical receipts.
“A few years ago, you would not have been able to build the system that we built [with Sweep],” he explained. “Before PSD2, U.K. banks would never share data with any third party.”
Expense management is yet another use-case for open banking and PSD2 regulations that initially disrupted the consumer financial services space but are quickly making their mark on B2B solutions.
Integration, said Ridelle, is key to streamlining travel and expense management processes for small businesses and freelancers — and not only in the use-case of integrating an expense management platform directly with a bank account feed. He said that Sweep is gearing up to launch a corporate travel booking platform in September to provide a more holistic T&E experience and connect travel booking to spend management and reconciliation.
And, moving forward, the company also plans to offer a spend analysis platform that similarly integrates with the expense management portal, again in support of integration from booking to expenditure to reconciliation and analysis.
He noted that this is another challenge for the smallest of the small businesses.
“The issue that [SMBs] encounter on a regular basis is they want to make the best use of their data, but they don’t have the right tools,” he said. “If they did it manually in Excel spreadsheets, it would take so much time — they would have to hire another person to do that. Solving that problem means small businesses have the ability to put the data sets of travel booking and expenses together in a meaningful way, which brings a huge amount of value to those businesses.”