Scouting the best contractor services for you

Latest News

Verdict on Taylor Review of Modern Working Practices

IPSE Delivers Verdict On the Taylor Review

Last month marked the publication of ‘Good Work: The Taylor Review of Modern Working Practices’. This analysed the challenges facing the UK’s labour market and set out seven principles to address these, in the hope of providing ‘good work for all’.


Now Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed (IPSE) has delivered his verdict.

According to a recent article in Contractor Calculator, Bryce believes Matthew Taylor, the chief executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce, who conducted the review, should have been “more progressive in his thinking”. He believes that without some reconsideration, the review’s proposals will do little to help the self-employed.


Stop the sham

Bryce’s most urgent challenge to the review is that it “proposes little to tackle false self-employment” – whereby dishonest employers forcing sham contracts onto workers – despite the practice causing many of the issues raised in the report.


What’s in a name?

And for those who are legitimately self-employed, there are still problems around the definitions of their work. Rather than following IPSE’s recommendation for statutory definition of self-employment, the review instead proposes the introduction of a ‘dependent contractor’ status to replace the ‘worker’ status. Bryce notes that this status not only oversimplifies matters, since it doesn’t take into account all of the implications of IR35, but that it may also cause further confusion, particularly in the gig-economy. “There are many different ways of working in the gig-economy and each relationship should be judged on its own merit,” he notes. “Ushering droves of workers into this ‘dependent contractor’ category would be a huge mistake and in fact create more work for the tribunals.”


Tax hikes on the horizon

With its reference to the lower taxes raised by self-employment, the review also seems to support the government’s desire for a tax hike for the self-employed. Bryce points out that the review “fails to address the burden carried by the self-employed, who take on much more risk than employees, without the guarantee of pensions, holiday and sickness pay,” and that a tax hike that doesn’t factor this in would be ignoring the “reality of the situation”.

And while the review proposes to help the self-employed save for retirement and insure themselves against illness, Bryce is keen to point out that it won’t be enough to compensate for another tax raise, and that the government should be wary of imposing this measure.

“Self-employment generates substantial value in terms of gross domestic product (GDP), and restricting its appeal would damage this substantially,” he warns.


A rethink on IR35?

But there’s also good news; the review’s recommendation that tax and employment status should be streamlined points towards a possible rethink of the recent reforms to IR35 legislation.

“It’s almost HMRC’s mantra that employment rights have nothing to do with tax status – of course they do. It’s overwhelmingly unjust,” says Bryce. “So Taylor’s recommendation that tax and employment status go hand-in-hand can’t possibly be ignored.”


Despite this glimmer of hope, it seems there’s more thinking needed if Taylor’s promise of ‘good work for all’ is to include the self-employed. Here at Contracting Scout, we’ll continue to monitor reactions to the report, how the government is responding and what this could mean for contractors.

If you have any concerns or queries in the meantime, please don’t hesitate to get in touch with us.