7th August 2017

A new employment status category of ‘dependent contractor’ is the centrepiece of the long-awaited Taylor Review, a nine-month probe into modern working practices by Matthew Taylor, Chief Executive of the RSA.

The report, published in July 2017, suggests that a national strategy is needed to help provide security in such areas as wages, quality of employment, education and training, working conditions, work life balance and the ability to progress at work.

One of the areas of focus relates to the ‘gig’ economy, with the report recommending the creation of a new category of worker, known as a ‘dependent contractor’, to provide additional rights and benefits for those who are currently classed as self-employed, but who work for businesses which have a ‘controlling and supervisory’ relationship with their workers.

The additional benefits would include sick pay, holiday entitlement and the minimum wage, and the new employment status would also oblige these businesses to pay national insurance contributions for these workers.

Business groups have given mixed reactions to the report’s findings, with many welcoming the focus on labour market flexibility, but also warning that some areas, including the plans to rewrite employment status tests, are a cause for concern.

Lee Muter, Employment Taxes and Payroll partner at UNW said: “It is clear that the subject of employment status both for tax and employment law purposes remains a key and complex issue for employers and contractors alike. While the growth in self-employed entrepreneurs has been a success story since the last recession, there are still some obvious concerns about the rights and tax liabilities of these key workers which have often been legislated for piecemeal and without reference to the impacts on employers and contractors. It is hoped that the Taylor Review results in a more holistic and clear approach towards this vital sector of the economy so that entrepreneurship is not stifled by the costs and requirements of any new legislation.”

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