We reported on the Government’s proposal to clamp down on false self employment last year. Since that announcement, the Ministry of Defence was, earlier this year, fined £1m for failing to seek assurance from a number of workers on their tax arrangements. The Department of Health was also fined £470,740 because two of its board members were off-payroll for over a year.
The Government is expected to announce in its autumn statement later this month that there will be a clampdown on employers paying workers via umbrella companies or personal service companies in order to save tax, reduce its pension bill and avoid paying national insurance contributions. As a result, the current several million self-employed workers in the UK may have to go on their client’s payroll. This will inevitably lead to employers incurring significant costs which were not anticipated when initially taking staff on.
The construction, security, catering and driving industries will feel the pinch the most should the Government power ahead with its proposals as these businesses most commonly use these types of arrangements. We will report again once the Government’s proposals are made clear.