Are changes to tax and National Insurance rates for ‘workers’ not entirely ruled out? - PwC comments on Taylor review response

Feb 07, 2018

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Commenting on the Government’s response to the Taylor review of modern working practices, Julian Sansum, employment partner at PwC, said:

“The entrepreneurship of the UK labour market provides a strong competitive edge that must be maintained as Brexit approaches. The Good Work Plan looks to address issues that are clearly in need of attention and it is encouraging that the Government has launched consultations on four key areas. This provides business with the opportunity to feed into the process, allowing any change to be implemented practically without disrupting the economy.

“The Government has clearly said that it is not going to change the rates of tax and National Insurance contributions (NICs) for the self-employed or employees, but presumably will use the consultation on employment status to clarify the position as to whether an individual should be treated as an 'employee' or 'self employed'.  In terms of the third status category ('worker'), the wording of the Government’s announcement may have left the possibility of making changes to their tax and National Insurance wide open.

“The focus on 'workers' is interesting and it is noticeable that references to the proposed changes are for 'workers' and not 'self employed'. In the UK most people provide work as either 'employees' or 'self-employed'. 'Worker' is an intermediate category whereby under current law, benefits such as minimum wage and holiday apply but certain employment benefits are not available. Many of the recent 'gig economy' cases were arguing that individuals treated as self-employed should be treated as workers.

“While the announcement stated that there will be no change to the to the rates of tax or NICs for employees or the self-employed, no reference is made in this respect to ‘workers’. This could suggest that changes to the tax and NICs of ‘workers’ have not been entirely ruled out.”

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