A leading tax expert has declared that a strategic review of the entire legislative framework concerning contracting professionals is necessary if the government is to achieve a simplified tax system.
Crawford Temple, CEO of trade association PRISM, explained that the existing tax framework was created in an era when everyone was either employed or self-employed; however, these traditional categories fail to encompass the UK’s flexible workers who, at over 10 per cent of the working population, are now too numerous to “brush them under the carpet”.
Mr Temple enumerated six key outcomes a review would achieve:
- A simplified and more easily-understandable tax system.
- Proper recognition of the different sectors of the labour market to achieve the right taxes for the right workers.
- The removal of unintended market distortions resulting in a genuinely level playing field.
- Improved management of the tax gap through increased tax compliance.
- A clear legislative roadmap for realising the government’s long-term objectives.
- Increased compliance throughout the supply chain.
Describing these results as “a win-win situation for the government”, Mr Crawford added: “If we don’t get a review, we are concerned about the threat to UK plc’s flexible workforce, which has delivered real results for business and helped pull the UK economy out of recession. The current sticking plaster approach provides little certainty to workers, recruitment companies, suppliers or engagers and creates unintended consequences in the market requiring yet more sticking plasters.”
The over-riding principle, Mr Crawford said, was to ensure that temporary workers had the same clarity and tax certainty over their tax affairs as employees, self-employed people and entrepreneurs.