OTS: stock take on the self-employed

Evaluation update and stock take of OTS work on corporation tax, personal service companies and self-employed people’s taxation

On 26 March 2020, following his announcement on the Covid-19 support package the for self-employed, Chancellor Rishi Sunak noted with regard to NIC: “It is now much harder to justify the inconsistent contributions between people of different employment statuses. If we all want to benefit equally from state support, we must all pay in equally in future.”

This may have prompted the Office of Tax Simplification (OTS) to release its evaluation update and stock take of the work it has carried out on corporation tax, personal service companies and self-employed people’s taxation. As a previous a Senior Policy Adviser to the OTS, I was personally involved with some of this earlier work.

Despite numerous reports from the OTS on a wide range of issues affecting the self-employed, PSCs, micro- and nano-companies, we do not appear to be much further forward.

Alongside the OTS reports, the government commissioned the Taylor review and has issued various consultations, most notably the Employment Status consultation, which has yet to be answered. The Department of Business, Energy and Industrial Strategy also published various reports on the subject of employment status.

Various private individuals and organsiations have contributed to the debate on tax and employment status. Most recently in July 2020 professor Judith Freedman, who is now on the board of the OTS, published Tax and employment status: myths that are endangering sensible tax reform. The Institute for Fiscal Studies (IFS), meanwhile, issued Employment Status, Tax and the Gig Economy—Improving the Fit or Making the Break?

The Supreme Court is currently considering the employment status of Uber drivers, but the judgement isn’t expected for many months to come. Will it clarfy or mystify this very complex area of tax and employment law? 

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Published: 20 July 2020