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Employment status is one of those intractable issues which never goes away. A couple of weeks ago we published a very interesting article by Matthew Watkins exploring the idea of a statutory employment test: in this edition you will see one of our regular contributors Alastair Kendrick takes a rather different approach. I welcome the debate and we can make space for anybody else who wants to contribute to the discussion.
I remember speaking to a senior HMRC official some years ago and making the suggestion – not entirely tongue in cheek – that the simplest solution would just be to give people a choice. Either they could become employees under PAYE but with all of the rights which come from employment status or they could be self-employed with no access to any rights or state benefits. The problem with this, I was told, is that while it could conceivably work for those in well-paid jobs who could take advice and make rational decisions it would be dangerous for the more vulnerable in society. Unscrupulous employers would be happy to exploit the system and force their workers to ‘elect’ to be self-employed – or perhaps electing on their behalf without them knowing – and we could have a whole lot of people cut off from any support. The tragedy involving Chinese cockle pickers at Morecambe Bay resonates throughout Whitehall and anything which gives opportunities for exploitation of the vulnerable raises huge red flags.
The memory of this conversation has never left me. We do, understandably, tend to think of employment status though the lens of tax and National Insurance but there is a broader social dimension here – any proposals which do not take account of that will have no chance of being adopted.
If you do one thing...
See the recent updates on research and development in the HMRC manuals (tinyurl.com/hmrccirdmjul).
