The Government will publish a discussion paper as part of its response to the Taylor Review, exploring options for reform to employment status tests.
Employment status has remained in the spotlight due to the publication of the Taylor Review during the Summer and recent high profile cases involving ‘Gig Economy’ companies.
We published our thoughts on the Taylor Review back in July and, prior to that, also published an update regarding the many Government reviews of this area. It is no secret that the rules are notoriously ambiguous and difficult to apply in practice. And as a consequence it has remained politically sensitive.
Today we got our first hint about the Government’s direction of travel. The Government announced that it will publish a discussion paper as part of its response to the Taylor Review exploring the case and options for longer-term reform to make the employment status tests for both employment rights and tax clearer.
We are expecting to see the Government’s full response to the Taylor Review before Christmas, and this may complement the report and recommendations published jointly by the Work & Pensions and Business, Energy & Industrial Strategy Committees on Monday 20 November, a summary of which can be found here.
Clearly the IR35 rules and the employment status of workers remain key areas of focus for HMRC and the Treasury. However, as we have previously noted we would welcome a more fundamental review of the way in which the UK taxes labour in the 21st Century. We would hope that any future reform will lead to a narrowing of the current fiscal differences between employment and self-employment, reducing their influence on the way in which workers are engaged, particularly as regards the NIC position.
For more details, please contact:
Colin Ben-Nathan, Partner
T : +44 20 73113363
Mike Lavan, Director
T : +44 20 73111437