HR · 1 December 2015

UK employment status measures help self-employed and freelancers

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A fresh new set of measures addressing UK employment status have been introduced by the government

New efforts to address UK employment status will see the government introduce a cross-departmental working group, create an employment status portal, a new helpline and fresh guidance for the self-employed and those businesses working with freelancers.

The new measures will be Introduced in response to the Office of Tax Simplification’s (OTS) employment status review conducted in March this year, which recommended 28 courses of action the government should take.

In the Autumn Statement last week, chancellor George Osborne clarified that the government would follow the “majority” of the OTS’s recommendations, without revealing which ones. An open letter by treasury minister David Gauke has revealed the government will follow 17 of the recommendations, “further consider” six, and reject four.

Significantly, the government will not yet be exploring ways to introduce a Freelancer Limited Company (FLC). Originally proposed by the Labour Party and subsequently tabled by the Self-Employed and Freelancer Association (IPSE), the FLC would have offered a new form of limited liability company for freelancers.

Small businesses that regularly hire freelancers may be relieved by the news. Responding to reports earlier in the year that possible changes to tax laws may compel firms to add freelancers to client payroll lists, chief executive of the Association of Independent Professionals and the Self-Employed, Chris Bryce, warned that such measures would make operating a freelance business “almost impossible in certain instances” and would cause “untold damage” to the flexible economy.

In the letter, Gauke oulined that improvements to the government’s Employment Status Indicator (ESI) would be made by April 2016.

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ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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