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KPMG response to the consultation on employment status

PMG response to the consultation on employment status

The Taylor Review of Modern Working Practices highlighted that the labour market is rapidly evolving.


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Flexible, innovative ways of working are challenging the traditional employment model and distinguishing between workers, employees and the self-employed is becoming increasingly complex. The government launched a consultation on employment status to canvass opinion on the current issues with the employment status framework, how to improve the status test, and whether it is desirable to align the tests for tax and employment.


KPMG’s experts from Employment Legal Services, Employment Tax and VAT responded to the consultation.


Commenting on the consultation, Donna Sharp, Director of Employment Legal Services, said:


“Employment status has far reaching consequences and it is important that there are clear and distinct categories of labour that individuals and businesses of all sizes are able to understand. This can only be achieved by ensuring the statuses reflect modern working practices, and whereby they balance the legal, tax, commercial and operational drivers that determine how businesses operate day-to-day.


“In our opinion, the existing three-tiered framework should be simplified and replaced with a two-tiered test of employed and self-employed.  There should also be a fuller debate on the meaning of employed and self employed in the modern world but, in any event, their meaning should be aligned to the employment tax position. Instead of creating a new category of “dependent worker”, government should address the protections, rights and entitlements which should be afforded to employees and how they should apply in particular circumstances.


“This is an evolving landscape and it is important that the impacts of any reforms are carefully considered. Balancing the needs of businesses and employees is a difficult task and we look forward to reviewing the outcome of this consultation.”





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Faye Lawson

PR Manager

M: 0776 699 7920

T: 020 7311 2814




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KPMG Press Office: +44 (0)207 694 8773


Notes to Editors:


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff.  The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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