What would I likely find in 3- 5 years’ time when viewing how the UK government has approached self-employment?

IR35 is due for its ‘overhaul’ in April 2021 and criticism of the so called “gig economy” and the treatment of subcontractors is a regular feature on Fleet Street, yet it still seems not a great deal is being done to change anything.

The Taylor report came… and went with a whimper it would seem, although at one point it heralded a much-lauded upheaval of what it means to be self-employed in the 21st Century.  One might argue that beyond the new rules for IR35 in 2021 there won’t be the stomach for more change.

Self-employment is being debated more and more recently, especially in these uncertain times due to Covid-19 and the growing national debt, I think it is fair to say that HMRC will want their pound of flesh.

So where might they start to recoup this mountain of debt? Large corporates and their very low corporation tax bills? Been there, not done that. An increase in income tax?  Well, that doesn’t win votes no matter how obvious and sensible it might be.

Self-employed compliance – or rather a lack thereof – has always provided a fertile hunting ground for HMRC.  Over the next few years, it wouldn’t be too much to expect HMRC to up the ante in their efforts to gain quick wins from businesses who have not taken their compliance seriously.

There were 5 million self-employed workers in the UK at the end of 2019.  With those sorts of numbers any type of tax levy presents a decent amount of money for the Government coffers – especially when HMRC can target engagers and reclassify subcontractors in swathes, collecting considerable tax liabilities from a single enquiry.

For engagers, this presents a very real risk, and not to mention the potential for workers who, financially stretched because of Covid, are looking for quick wins and pay-outs from engagers by claiming worker or employment rights at Tribunal.

While no one knows exactly what the future holds, it is more important than ever to make sure your business is able to demonstrate genuine self-employment when engaging with self-employed subcontractors. With a range of products and services which can be tailored to meet your business’s requirements, HQ35 can help you ensure you are in the best position possible should you be on the receiving end of an HMRC enquiry or employment tribunal claim.

Admittedly, I think I speak on behalf of everyone when I say employment status is the last thing you’d be thinking about when presented with a time machine! However, if thinking about employment status now means still having a business to consider in the future, it might actually be worth a thought.