HM Revenue & Customs to widen the target of “false self-employment”
HMRC has announced that it will be establishing a dedicated team to review the working practices of companies which engage a high number of freelancers who are filling roles which would, in all likelihood, be regarded as a full-time role.
How workers are engaged has come under close scrutiny especially where they are not included directly on the payroll. We have already seen changes to the tax and national legislation with regards to agency arrangements and further changes to the IR35 rules are due to apply from 6 April 2017. The proposed changes to the IR35 legislation will require an engager who is a public body, as defined by the Freedom of Information Act 2000, to operate PAYE and National Insurance on payments made to the personal service company.
However, the new target of HMRC’s attention will relate to those roles which are described as self-employed but are almost exclusively providing their services to one engager. The Government is concerned on two fronts, the first being that individuals are not benefiting from things such as sick pay, maternity leave and access to a pension. The second concern is the potential loss of National Insurance which the Treasury has estimated to be in the region of £300m.
Whilst we await further developments if you have any concerns relating to employment status, please contact Nick Bustin, Director of Employment Tax on 020 7969 5578 or via email: firstname.lastname@example.org or your usual haysmacintyre contact.