Employment status review before 2015 Budget

Employment status review before 2015 Budget

With business behaviour changing and an increase in people working in multiple roles, there is a need for the government to look at the tax system.

Many people are working for more than one business where they may be classed as employed for one role and self-employed for another. Freelancing and contracting levels have grown and times are changing in the way we conduct business. A suggested ‘third way’ of working between employment and self-employment is becoming a more popular approach.

With significant tax and NIC differences between both ways of working, The Office of Tax Simplification (OTS) has been requested by the government to look at the dividing line and provide a report before the 2015 Budget.  Getting the status right is important as the wrong way of working could be costly for both the company and the individual.

As part of their review, the OTS will look at some of the following:

  • The level of uncertainty in current employment status
  • The sectors that have difficulties in administering the tax system
  • The way in which current rules and guidelines fit with anyone working multiple roles
  • The possibility of simplification through increased use of digitisation
  • The way other countries manage their approach

However, the review will not include issues around IR35, the Construction Industry Scheme (CIS) or the expenses rules.

With a report in time for the 2015 Budget, it is likely that any ‘quick wins’ will be taken forward as soon as possible, with other points to be reviewed by the next government.

The full terms of reference can be found online. https://www.gov.uk/government/publications/employment-status-review


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