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Taylor Report Review

11th July 2017

Today the Taylor Review of Modern Working Practices was published.

The review, which was overseen by Matthew Taylor, Chief Executive of the RSA, was commissioned to look at the changing landscape for employing people as employees, self-employed or via some form of intermediary. The advent of the “Gig” and shared economies, the use of zero-hours contracts together with the recent Employment Tribunal cases involving Uber, CitySprint and Pimlico Plumbers have brought the topic to the public’s attention.

It is interesting to note the fiscal issues the Review has identified: in particular the different rates of tax on different forms of work undertaken by individuals will have an impact on the money raised by the Government in tax and National Insurance. HM Revenue & Customs estimate the Government is losing a staggering £5.1bn each year from the lower rates of National Insurance paid by the self-employed. Furthermore, as the number of people who are providing services through their own company is increasing, it is anticipated this will cost the Exchequer a further £3.5bn a year by 2021-22.

The Review recognises that whilst there is a marginal difference in the level of National Insurance  paid by both the self-employed and employed, employers make a considerable contribution to the Exchequer in the form of secondary (employer only) National Insurance contributions.

Certainly the Review is of the opinion that the Government should examine the current tax system to address the disparity in the amount of tax and National Insurance applied to employed and self-employed labour.  The 116 page report is wide ranging and will take some time to consider in full.

For further information regarding the Taylor Review or about employment status, please contact Nick Bustin, Director of Employment Tax on 020 7969 5578 or via email nbustin@haysmacintyre.com

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