A Review of Issues Relating to Employment Status

Mark Morton reviews the recent issues relating to employment status ahead of our Spring Tax Update courses. 

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Transcript

Hello, welcome to this Mercia podcast. It's now the fourth week of February and we continue to see a lot of movement in a number of respects regarding employment status. Of recent times we've had yet another sort of historic IR 35 case, Brian Robson, former England football captain and his relationship in relation to work he was doing for Manchester United being we continue to see a lot of warnings around the commercial marketplace and from HMRC relating to managed service companies and the position of the workers. 

The strange thing is, you know, it's over 20 years since IR35 came in. Again, a bit like R&D never really enforced by the revenue for a long time. You know, people went along that I've never been investigated. Hence, you know, irrelevant of what the answer is, I'll carry on regardless. We've now had off payroll incoming agency rules have changed in my working life, managed service companies, which are supposed to Create a pay as you were in an NI liability or on a, on an umbrella structure. 

All of these things are floating around, but of course they're all subject to compliance. And interestingly, the loan charge aspects of that being reviewed, not the whole thing before anybody gets too excited, but the government announcing a review of the loan charge. Now, in some respects, I have sympathy for some of the individuals concerned particularly moving on to where we are now because they were sold a product As lay people clearly didn't work, wasn't going to work, and of course the buck comes to rest with the poor old individual at the bottom. 

Very few cases at the moment where the revenue are pursuing the liability at the top of the chain, I suspect because a lot of those entities that have missold these products, you know, liquidate and disappear into the blue yonder. I think the fundamental point that underpins all of this is that status, No control, mutuality, substitution, financial risk is not understandable by the courts and certainly not understandable by any normal human being and therefore try to work out what the employment status is on day one is not simple for you, me or in fact anybody else. 

Until such time as you change it to much simpler tests you will continue with this chaos and particularly when you look at the courts, the chaos of the courts not understanding, How to apply the test nowadays? Well, the greatest respect if the courts can't apply it, then you and I have probably got little chance of, you know, ultimately getting to the correct answer. 

So a lot of movement in terms of case law, a lot of term movement in terms of the revenue enforcing, well, enforcing messaging about enforcement, I would say more so with managed service companies. When will it end? Well, I suspect I'll be dead and buried before. Anybody get to the bottom of this. 

I'll be very interested to see where the current government actually address it because One of the first things they've done coming into power is to create new employment rights Which are all well and good if you're an employee, of course, you know, and of course, it's got to be enforced and if you are Selling again dubious products to individuals then they won't get the employment rights. 

So I think Commercially it just needs a whole, you know big rewrite in terms of simplicity and where the book ultimately stops. And the book should ultimately stop at the client that is using that worker. You know, look through all the individual arrangements, apply a simple test and say, whoever's at the top of that commercial chain has to apply pay as you earn. 

I don't know, how complicated can it be? Anyway, if you'd like to listen to a bit more on this subject, And lots of other subjects as well. Please feel free to come to our spring tax update. We're doing a lot of courses still in person, some online. Feel free to book your place. Thanks very much. Bye.