This article provides a helpful update on the various strands of work currently ongoing in relation to the ‘Gig Economy’. At the Autumn Statement, the Office for Budget Responsibility estimated that the ‘Gig Economy’ will cost the Treasury £3.5 billion in 2020/21 in lost tax revenues. With that in mind, the way individuals work and how this work is taxed is becoming an increasingly important topic. There have been many reviews announced into this sector of late so we have provided a summary of them below.
- The Treasury Committee has called for evidence and views on the shrinking tax base. Specifically they have asked for views on multi-jobbing and different ways of working;
- The Taylor Review was launched in November 2016 under the instruction of the Prime Minister. This will look at modern employment practices and is being undertaken by the Royal Society of the Arts;
- The Business, Energy and Industrial Strategy (BEIS) Committee launched an inquiry into the future world of work focussing on the status and rights of workers operating in the ‘Gig Economy’;
- The Work and Pensions Committee has also started their own review to consider how the welfare system can support self-employed gig workers; and
- A Cross-Government Working Group on Employment Status is also considering the potential to move to a more uniform set of tests on employment status across tax, employment rights and the welfare and social security system.
All of the reviews above are being undertaken at the same time as:
- A focus paper from the OTS which looks at the tax issues that arise as a result of the growth of the ‘Gig Economy’;
- The wide ranging press coverage of the Uber judgment and further comments on other high profile operators in this market; and
- HMRC have also set up a specialist employment status and intermediaries team with a remit to take ‘all necessary steps’ to ensure that employers are paying the correct amount of tax and NIC and engaging workers correctly. This move is intended to clamp down on those employers and organisations operating in the 'Gig Economy' who may have incorrectly classified workers as self-employed.
It is clear that this topic is expected to increase in importance as we move into 2017.
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