Donna Sharp, Director in KPMG Employment Legal Services team in the UK, comments on today’s response from the Government to The Taylor Review of Modern Working Practices:
“The Taylor Review’s recommendation to address the disparity between the level of income tax and National Insurance Contributions (NIC) applied to employed and self-employed individuals is not to be taken forward. Given the distorting effect that this disparity can have on how business engages labour, we think the Government should more thoroughly engage in a wider dialogue on how the UK should be taxing labour in the twenty-first century.
“This said, the Government’s commitment to ensuring individuals and businesses are more easily able to understand when someone is an employee, worker, or self-employed is to be welcomed. However, it is not yet clear whether changes will be made as to how these working relationships will be established.
“The Government’s responses to the proposed consultation exercises, and how these might translate into changes to employment law (in particular, how employment status is determined) will be key in how modern working practices develop. We will review the Government’s full response to the Taylor Review, and the consultation documents, and publish our detailed comments in due course.
“Publication of the ‘Good Work Plan’ and the associated consultations are an important step in this journey, but there remains some way to go.”
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