IPSE responds to OTS report on taxation of platform & gig workers


A proposal to have online platforms to take responsibility for fulfilling the tax obligations of their self-employed workforces would leave people out pocket and drive up prices for consumers, IPSE says.
 

The Office of Tax Simplification report ‘Platforms, the Platform economy and Tax Simplification’ makes a number of recommendations, including that: “the government should consider the case for enabling technology platforms such as  taxi or delivery firms to operate a system equivalent to PAYE for self-employed platform workers (without affecting their employment status).”

 

IPSE’s Deputy Policy Director, Andy Chamberlain, comments: “The OTS report rightly points out the majority of platform workers are satisfied with their income, and value the flexibility this way of working offers.

 

“Unlike most businesses, the self-employed don’t have access to departments to help them sort out taxation affairs, so IPSE openly welcomes discussions about simplifying the process of collecting taxes.

 

“However this proposal to make the taxation of certain self-employed individuals more closely mirror that of employees will have a number of untended consequences.

 

“The problem is the two are entirely separate and any attempt to treat them in the same or similar way for tax is likely to create significant problems, particularly for self-employed individuals.

 

“The self-employed could be left out of pocket because it isn’t clear how legitimate business expenses will be accounted for under such a system, or whether there will a mechanism to account for their more volatile incomes.

 

“The courts have also said that autonomy and control are defining features of self-employment, so this proposal could add further confusion to the already vexed issue of employment status. 

 

“There is also a real risk that this proposal would increase administration costs for online platforms which operate in competitive marketplaces. These costs would either have to be passed on to consumers, or absorbed by the platforms which risks reducing the opportunities for the self-employed.”

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