Contractor groups concerned over de minimis employee status proposal
10 March 2015
Contractor groups have expressed concerns over the Office of Tax Simplification’s (OTS) proposals for a new ‘de minimis’ level of employee.
Tue, 10 Mar 2015
Contractor groups have expressed concerns over the Office of Tax Simplification’s (OTS) proposals for a new ‘de minimis’ level of employee.
Last week, the OTS published a report into worker employment status. The report puts forward the option of a de minimis – or minimal – level of employment status that would apply to a person who is paid under a certain level or for less than a defined period, and who carries out some activities for a firm but would definitely not be regarded as an employee.
But the proposal has been met with concerns from contractor representatives. Juliet Byrne, legal and technical director at contractor and staffing industry services group Optionis told Recruiter the proposal would drive unscrupulous companies and employers towards offering assignments that appeared to fit within the de minimis limits.
“We’re doubtful that anti-avoidance measures would adequately deal with those types of companies,” she said.
Byrne added it is also currently unclear how the proposal would work with existing legislation such as the Agency Worker Regulations (AWR) and the Elective Deduction Model where workers remain on self-employed contracts but earnings are taxed under S44, which effectively prevents self-employed workers, supplied by an recruitment agency to an end user but paid via an intermediary, from remaining self-employed.
While Andy Chamberlain, deputy director of policy and external affairs at the association of independent professionals and the self-employed (IPSE), described the proposal as “appealing”, he too, harboured concerns.
In a statement, he said: “To base this on a de minimis threshold of time and or incomes seems sensible. This would bring clear advantages for businesses looking to engage self-employed workers on an infrequent basis.”
“However, such a scheme needs a lot of further study in terms of how it would work in practice. One immediate concern is the possibility of contracts being artificially terminated or restricted to fall within the threshold.
“Overall IPSE believes it is currently too difficult to ascertain employment status and it should be as easy as possible for a business to engage an independent professional. Any measure which seeks to do this is worth considering.”
Recruiter approached the TUC (Trades Union Congress) for comment but the organisation did not respond by press deadlines.
Last week, the OTS published a report into worker employment status. The report puts forward the option of a de minimis – or minimal – level of employment status that would apply to a person who is paid under a certain level or for less than a defined period, and who carries out some activities for a firm but would definitely not be regarded as an employee.
But the proposal has been met with concerns from contractor representatives. Juliet Byrne, legal and technical director at contractor and staffing industry services group Optionis told Recruiter the proposal would drive unscrupulous companies and employers towards offering assignments that appeared to fit within the de minimis limits.
“We’re doubtful that anti-avoidance measures would adequately deal with those types of companies,” she said.
Byrne added it is also currently unclear how the proposal would work with existing legislation such as the Agency Worker Regulations (AWR) and the Elective Deduction Model where workers remain on self-employed contracts but earnings are taxed under S44, which effectively prevents self-employed workers, supplied by an recruitment agency to an end user but paid via an intermediary, from remaining self-employed.
While Andy Chamberlain, deputy director of policy and external affairs at the association of independent professionals and the self-employed (IPSE), described the proposal as “appealing”, he too, harboured concerns.
In a statement, he said: “To base this on a de minimis threshold of time and or incomes seems sensible. This would bring clear advantages for businesses looking to engage self-employed workers on an infrequent basis.”
“However, such a scheme needs a lot of further study in terms of how it would work in practice. One immediate concern is the possibility of contracts being artificially terminated or restricted to fall within the threshold.
“Overall IPSE believes it is currently too difficult to ascertain employment status and it should be as easy as possible for a business to engage an independent professional. Any measure which seeks to do this is worth considering.”
Recruiter approached the TUC (Trades Union Congress) for comment but the organisation did not respond by press deadlines.
- Want to comment on this story? The Comment box is at the bottom of the page. Sorry for the glitch but just scroll right down and share your opinions!
