The fast-emerging sharing economy brings huge opportunities, but also major challenges for budding entrepreneurs, a leading contracting specialist has warned.
Nova Contracting said that although the sharing economy headlines were dominated by companies such as Airbnb and Uber, start-ups and freelance operators looking to emulate the new business model, should beware of potential pitfalls.
Nova Director Marcus Green said: “There is no doubt that these business models are changing the nature of how we work as well as how we buy and use products and services. Legislation will play catch-up with the burgeoning market and rulings on what classifies an employee and what classifies a contract worker are likely to follow.
“But in the interim, start-up businesses and freelance operators providing their services over the Internet, must comply with existing rules and legislation to protect themselves and avoid possible fines and penalties from HMRC.
“We are seeing a marked increase in Internet-based service provider clients, who want to ensure they are operating compliantly. Start-ups particularly value the ability to focus entirely on delivering their service and building their customer base, with the confidence that there won’t be unexpected tax bills at the end of the year or any unforeseen penalties.
“As the regulatory, legal and tax framework adapts to the new sharing economy, consumer confidence in the business model will increase and the sector can look forward to continued growth. Early innovators have the opportunity to help steer the revolution.”