Matthew Taylor has declared that he has no intention of increasing burdens for truly self-employed contracting professionals.
Mr Taylor was speaking live on BBC Radio 4’s Moneybox Live, responding to concerns expressed by CEO and founder of ContractorCalculator, Dave Chaplin.
Mr Chaplin acknowledged that precariously engaged freelancers in the gig economy needed rights and protections but stressed that the vast majority of highly skilled independent professionals who have actively chosen to work on a contracting basis do not view themselves as vulnerable and do not wish to be granted rights.
He asked Mr Taylor how he would protect low-paid self-employed workers, who are definitely in need of protection, without hampering the higher-end independent professionals in the flexible workforce.
Mr Taylor was clear in his reply: his review does not plan to increase the burden on professional contractors who are genuinely self-employed.
However, he proceeded to emphasise that the whole question of self-employed tax is in need of attention. The rapid expansion of self-employment, he pointed out, has resulted in a growing fiscal gap for the Treasury that needs to be filled. The Treasury estimates that rising self-employment is now costing it £3bn per year.
Speaking afterwards, Mr Chaplin said that it was good to hear that the Taylor Review will not be recommending any targeting of the genuinely self-employed contracting community. He also applauded Mr Taylor’s commitment to challenge and crack down on companies that are exploiting the gig economy to squash workers’ rights, pay them under the National Minimum Wage and refuse them benefits to which they ought to be entitled. Such unscrupulous companies should be “made to treat their workers fairly and appropriately,” he added.
However, Mr Chaplin repeated that he does not want to see burdensome legislation aimed at protecting vulnerable workers having a destructive impact on the professional contracting market. Addressing the fiscal disparity raised by Mr Taylor, he argued that while a closure of the tax rates applied to employed and self-employed labour is inevitable, it is the issue of National Insurance that he believes is one of the main factors forcing people into false self-employment.
He continued: “To remove the motivation to encourage false self-employment, I would suggest that the Government looks at phasing out Employers NI and moves to collect those taxes elsewhere, making the cost of hiring labour, whether through employment or self-employment, the same. A complete tax overhaul is long overdue, as the tax system is stuck in the dark ages. This could be the solution.”
Umbrella Company trade association PRISM has already embarked on this by sponsoring the Social Market Foundation think tank to conduct a strategic review of the tax system.