The Low Incomes Tax Reform Group (LITRG) is concerned that Matthew Taylor’s review of the ‘gig economy’ cannot be seen as a comprehensive review of employment practices without considering ‘the intertwined relationship’ between employment law and tax. ‘In our view, you cannot understand one without the other,’ said Anne Fairpo, chair of LITRG.
The LITRG uses the example of statutory payments, such as sick pay or maternity pay, which are often thought of as employment law ‘rights’, but are actually dependent on whether there is a ‘secondary contributor’ paying employer’s NICs.
Exploitation of workers is commonly accompanied by problems with PAYE deductions and, as Fairpo points out, ‘minimising tax or trying to avoid HMRC administration is often a factor in terms of employers offering non-standard forms of work’, even where there is no legal wrongdoing.
The LITRG hopes to see a recommendation in the Taylor report for a review that includes tax and related issues ‘as a matter of urgency’.
The Low Incomes Tax Reform Group (LITRG) is concerned that Matthew Taylor’s review of the ‘gig economy’ cannot be seen as a comprehensive review of employment practices without considering ‘the intertwined relationship’ between employment law and tax. ‘In our view, you cannot understand one without the other,’ said Anne Fairpo, chair of LITRG.
The LITRG uses the example of statutory payments, such as sick pay or maternity pay, which are often thought of as employment law ‘rights’, but are actually dependent on whether there is a ‘secondary contributor’ paying employer’s NICs.
Exploitation of workers is commonly accompanied by problems with PAYE deductions and, as Fairpo points out, ‘minimising tax or trying to avoid HMRC administration is often a factor in terms of employers offering non-standard forms of work’, even where there is no legal wrongdoing.
The LITRG hopes to see a recommendation in the Taylor report for a review that includes tax and related issues ‘as a matter of urgency’.
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