Matthew Taylor has told ContractorCalculator’s CEO Dave Chaplin that he has no plans to increase the burden for genuine self-employed contractors.
Speaking live on BBC Radio 4’s Moneybox Live (Wednesday 7th July), Taylor told Dave Chaplin that he had no plans to hamper the self-employed contractors who have chosen to work this way.
To listen to the programme: MoneyBox Live - 7th July 2017.
Taylor says no plans to puts burdens on professional contractors
Chaplin posed the question that many self-employed workers do not consider themselves vulnerable and do not want rights, going on to ask Taylor how he proposed to legislate to protect the lower paid self-employed workers who need protection but not impact the high end flexible workforce.
Taylor was quick to stress that his Review did not propose increasing the burden of the professional self-employed but he did say that in the middle term the question of self-employed tax needs to be addressed, pointing out that as self-employment is growing it is opening up a bigger fiscal gap for the Treasury that needs to be filled. The Treasury believes that the increase in self-employment is costing it £3bn a year.
Chaplin said, “It was good to hear Matthew Taylor say his Review does not recommend targeting the genuine self-employed contractor and I applaud his commitment to challenge and clamp down on firms which are using the on-demand gig economy to effectively suppress workers’ rights, pay them less than the minimum wage and deny them their rightful benefits. Such firms should be made to treat their workers fairly and appropriately. But we do not want to see burdensome legislation designed to protect those workers having a negative impact on the professional contracting market.
Taxes likely to increase though
“On the tax disparity he is concerned about, I would argue that whilst we accept the inevitability of a closure of the tax rates applied to employed labour and self-employed labour, one of the main issues that forces people into false self-employment in the first place is National Insurance.
To remove the motivation to encourage false self-employment, I would suggest that the Government looks at phasing out Employers NI and moves to collect those taxes elsewhere, making the cost of hiring labour, whether through employment or self-employment the same. A complete tax overhaul is long overdue as the tax system is stuck in the dark ages. This could be the solution.”
To listen to the programme: MoneyBox Live - 7th July 2017.
What does the future hold for contractors?
When the public sector IR35 reforms hit, many contractors caught by IR35 moved to employment-based models to claim workers’ rights. The only concern is that the Taylor Review could now hasten a wider rollout of these changes as a mechanisim to protect vulnerable workers forced into false self-employment. More here.