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Office of Tax Simplification – new project on employment status

The Office of Tax Simplification (OTS) has agreed a new project – to review employment status.

There are significant tax and NIC differences between employment and self-employment and getting the status wrong can be expensive.  The tax and NIC differences can influence business behaviour.

The Government has therefore commissioned the OTS to look at the dividing line between employment and self-employment and assess if it is drawn in the right place and in the right way.  In carrying out this project the OTS will consider:

  • If the UK’s current employment status tests result in uncertainty and if so, for whom and in which areas.
  • Those areas where difficulties in administering the tax rules are relatively common.
  • Trends in employment law.
  • HMRC guidance and advice.
  • The special cases regulations.
  • The scope for simplification through the increased use of digitisation.
  • International comparison and the experience of other countries in managing their approach.

The OTS has been asked to produce a report in time for Budget 2015.  This report will contain any appropriate ‘quick wins’ that it may be possible to take forward quickly.  However, it is likely that if the report suggests significant reforms, these would have to be dealt with after the next election.



Date: 13th August, 2014
Author: Cathy Corns


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