Government reportedly preparing crackdown on firms using self-employed workers to shirk payment of sick pay and pensions contributions

PUBLISHED: 08:43 20 March 2017 | UPDATED: 08:43 20 March 2017

File photo of Matthew Taylor, chief executive of the RSA, was brought in by Theresa May to carry out a review of employment practices. Photo: Ian West/PA Wire

File photo of Matthew Taylor, chief executive of the RSA, was brought in by Theresa May to carry out a review of employment practices. Photo: Ian West/PA Wire

The government is to crack down on companies using self-employed workers to avoid paying sickness pay, pensions contributions and maternity benefits, it has been reported.

A review commissioned by Theresa May has found evidence that growing numbers of firms are abusing the law by using self-employed workers to take on jobs previously filled by salaried staff, according to The Times.

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It is being carried out by Matthew Taylor, a former head of the No 10 policy unit under Tony Blair who now heads the Royal Society of Arts.

He told The Times: “Technology is enabling new business models and new ways of breaking jobs down, which means it is important to have clarity over the difference between employment and self-employment.

“There is a lack of clarity and in that fuzzy space some businesses are behaving in ways that are not appropriate.”

Speaking on ITV’s Peston on Sunday, Mr Taylor said one of the key issues he was looking at was the extent to which firms wanted to control their workers.

He said: “We need to say to firms, if you want to control your workers you will have to respect their rights and provide entitlements too, but if you really don’t want to control them, that’s fine, then they’ll be self-employed.

“But there look like there are cases at the moment where firms both want control but not to provide those workers with entitlements and rights.”

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  • JanieH, I will be a little more specific. The rules are quite clear about what is, or is not, an employee. All businesses and employees should abide by them. The old legal term is whether there is a 'master\servant' relationship. There are too many in local government or NHS for example who are all to all intents and purpose working as an employee which would I have thought crossed or be on the boundary between tax avoidance and evasion. The former is usually legal but the latter is not although same may attempt to redefine that latter as 'only' avoidance.

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    Wednesday, March 22, 2017

  • It isn't just companies using self-employed workers to shirk payment of sick pay and pensions contributions - francophile mentioned Consultants at Aviva working through limited companies and being paid £400-£500 per day for their services. What about the fact that Aviva has made thousands of its loyal long term staff redundant over the last 5-7 years and replaced them with Indian workers both working in Norwich and offshore in India doing work and job roles that the previous loyal long term Norwich UnionAviva staff used to do. Big companies like Aviva in conjunction with successive governments have turned a blind eye to the injustice to British workers and promoted massive immigration for IT job roles (mainly from Indian outsource companies) and allowed English workers in their hundreds of thousands to be laid off and their jobsroles be replaced by foreign labour in the interests of more profit for big business. I work in IT myself and have seen this shift in employment over the last 10 years or so. The problem for UK society is IT workers earn between £20000 to £50000 generally with some jobs paying much more than that up to £100000 or more in London financial firms. These high paying professional jobs are good for UK PLC as British workers spend the majority of their money in the UK. The Indian staff are paid have those salary costs (good for big business) send their money back to India to look after their families back in India. What amuses me now is the government talking about young people needing to learn IT skills to get jobs in the knowledge economy while at the same time working with big businesses to grant visas to foreign workers to come here and do a lot of those needed IT jobs. Either the politicians are pathological liars or one department doesn't know what the other is doing.

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    Marshall Elliott

    Wednesday, March 22, 2017

  • When I went self employed several years ago, I was told to be careful to always have more than one client on my books at any one time so that I could not be accused of being an employee dodging PAYE and NI. However, despite declaring all earningsexpenses to HMRC annually through self assessment, HMRC has never queried anything and I suspect they do not see it as their role to police the self employed. Just to make sure the correct amount of tax is paid and NI collected where due. Employers see taking on specialist self employed workers as a means to get the work done and involve simple payments with no need to put them on their payroll. When the costs of employing people become so large, you can't blame employers for wanting to make use of other, perfectly legal ways to minimise their employment costs. The situation has seemingly got out of control if it is now being investigated; the only way to track payments to the self employed is to put them through payroll as a non deductible payment in the same way as redundancy payments are made and then let HMRC tie it all up. But I can't see that happening!

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    Wednesday, March 22, 2017

  • Consultants at Aviva ,earning circa £2000 plus per week, hiding under the limited company laws and paying virtually no tax as they pay themselves dividends and they all have good accountants. In Germany there are some 20 thousand accountants but in the UK some 250 thousand, speaks volumes.

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    Monday, March 20, 2017

  • Quite Right 'andy' !...many people are actually encouraged to use so called 'Umbrella' companies to avoid PAYE !...and off set everything they can as 'expenses' !...

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    Monday, March 20, 2017

  • This subject appears to focus on what is often deemed to be lower paid but there are plenty of more senior posts who take 'advantage' of this including through setting up companies when in reality they are employed. This includes within the NHS, BBC and local government. The government needs to broaden it's focus.

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    Monday, March 20, 2017

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