The Chancellor of the Exchequer, Rishi Sunak, has announced a package of measures for the UK’s self-employed and contingent workforce.
Kevin Barrow, Partner in Osborne Clarke’s Contingent Workforce team, commented on the measures:
“While this is good news for many types of self-employed people, it’s not clear that individuals working through their own personal service companies will qualify for this support. The Job Retention Scheme does not obviously cater for those individuals (whose income mainly comes by way of dividend rather than employment earnings).
“And linked to this, perhaps the biggest news, is that the chancellor observed that this crisis means the tax advantages of self-employment (and operating via personal service companies) should be looked at generally. The clear suggestion is that if taxpayers are asked to subsidise the self-employed, those people should pay the same levels of tax as employed workers. This may mean a review of how the self-employed and personal service company contractors claim expenses and how employers NICs are not paid fully or at all in respect of their income.
“Perhaps the suggestion several years ago by the Office Of Tax Simplification that a statutory deduction should be applied to all payments in all labour supply chains (as it already is in construction under the Construction Industry Scheme) will be implemented. That might make the much-disliked IR35 and other intermediaries tax regimes redundant and would probably be much easier for users and suppliers of self-employed workers and personal service company contractors to operate.”