Default 'worker' status a smart move, says LITRG
Low Incomes Tax Reform Group (LITRG) has welcomed a recommendation in a
report by the House of Commons Work and Pensions Committee that the 'self employed'
should be given at least
'worker' employment status unless
the engager of their labour can prove otherwise.
a recommendation that LITRG made in written evidence to a separate inquiry.
believes that the denial of employment rights to people working in the 'gig
economy' and the exploitation of other flexible workers regarding their
taxes share a common cause - the workers' own lack of knowledge, their
reluctance to challenge their treatment because they lack confidence or just
need the work and the businesses involved apparently having little fear of
action being taken against them by public bodies.
responded to a Business, Energy and Industrial Strategy (BEIS) Committee
inquiry on the 'Future world of work and rights of workers' in
In answer to the question 'how should 'worker' status be defined', LITRG
suggested to BEIS that everyone be given 'worker' status unless it can be
shown that they are genuinely self employed. Although genuine
self employment would then need to be identified, most people would
intuitively have an idea of what this looks like so would have a better
starting point to understanding the 'worker' principle. This approach may
also provide a good basis for tackling poor employer practices.
Anthony Thomas, Chairman of LITRG, said:- "Workers
are often not aware of their employment status and therefore what employment
rights they are entitled to. Even if they can be sure of their rights, they
often have no practical way of securing them. By essentially reversing the
burden of proof regarding 'worker status', these issues become more
applaud the Work and Pensions Committee for recognising that change is
needed and making such a clear and bold recommendation. We can only hope
that the BEIS Committee and the Matthew Taylor review reach a similar
conclusion; such a point of unity among these separate works would truly
help move this issue forward. Of course, tax law only recognises
two types of status; employed and self employed; and so a lack of clarity
remains for 'gig economy' workers even if changes are made to employment
law. We would recommend that any changes in employment law are accompanied
by a thorough review of the Tax position of such workers, particularly given
that a good number of them are probably being treated as self employed