Good Work Plan – Employment Status

Feb 25, 2019

Last month, the government published its Good Work Plan in response to the recommendations Matthew Taylor made in his report. The contributions received during the consultation have helped inform next steps in this project. In 2018, the Northern Ireland Tax Committee responded to the consultation on Employment Status.

The government plans to continue to consider the evidence received in this process to inform detailed policy proposals but have not set out what the announcement means for employment status. While for the vast majority of individuals their employment status is clear, the evidence received supported the Taylor Report’s finding that the current employment status tests can fail to provide the clarity and certainty that individuals and businesses need.

For those at the margins, the complexities and lack of clarity can lead to mis-categorisation; this means some individuals can’t access the rights they’re entitled to, and some individuals and businesses do not pay the right taxes. To tackle this, the government does plan to legislate to provide greater clarity and certainty on employment status, reflecting the reality of modern working relationships.

The government also agrees with Matthew Taylor’s recommendation that reducing the differences between the tax and rights frameworks for employment status to a minimum is the right ambition, and will bring forward detailed proposals on how the frameworks could be aligned.

According to the response, bringing employment taxes and rights in line would be a clear simplification for businesses and individuals, as the majority of businesses would only need to consider one test for tax and rights at the start of a contract.

As Matthew Taylor recognised, it is not straightforward to define employment status in legislation. Any changes need careful consideration to avoid unintended consequences. The government intends to continue to work closely with stakeholders to understand the impact of changes and ensure that any reforms are fit for purpose.