Employment status: it's officially complicated

Photo of Justine Ricccomini By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

16 March 2017

The Department for Business, Energy and Industrial Strategy (BEIS) has published its report of a review undertaken on the current process for deciding on whether a worker is employed, a worker, or self-employed.

The report was actually commissioned back in 2015 but it has been made public now for the first time.  BEIS claims that this is because it is attempting to inform the Taylor Review into modern employment practices launched last October.

Working practices are more complicated than ever

However, the latest tranche of IR35 legislation which covers Public Sector Bodies, together with large-scale employment tribunal cases such as the Uber case, show us that working practices are in fact more fragmented now than they have probably ever been.  

And whilst Ministers acknowledge that there is a requirement in the UK for a flexible employment market, the recent increases in self-employed workers and so-called ‘Zero hours’ (or ‘casual’ in old money) contracts is resulting in lower tax and especially NICs receipts for the Exchequer – a cause for concern.

The report concludes that in spite of numerous options available for reform, the way forward is to carry out further research before diving in to hurriedly create another regime which could be even more problematic than the one we currently have to live with.  

One for the policymakers at HMRC to consider before releasing even more legislation, perhaps?

Find out more about the latest issues affecting employers

An update on employment issues will be given at the ICAS Tax Conference 2017, which takes place at the Radisson Blu Hotel, Edinburgh on Tuesday 23 May. Cost: Members and Students: £192 Non-members: £234 CAPS Firm: £174. All prices include VAT.


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