Differences in employment tax are unfair

2017-02-12 Jennifer Renney posted:

Differences in how employees, the self-employed and company owner-managers are taxed are 'costly, inefficient and unfair', according to a report by the Institute for Fiscal Studies (IFS). The IFS has concluded lower taxes for the self-employed are not justified by fewer employment rights. The report has set out a recommendation to level the employment tax playing field.

Interestingly, since 2008, a quarter of the growth in the workforce has come from the self-employed, with the total now at four million. The number of company owner-managers has doubled since 2008, currently standing at around 580,000.

The IFS also found that employed workers receive less favourable employment tax treatment, eg for a £15,000 income, tax on employees is £631 a year higher than if the income was earned by a self-employed person and £818 higher than if earned by a company owner manager.

Let’s hope that a levelling of the playing fields, which the IFS is suggesting, results in a reduction in taxes for employees, but somehow Renney and Co suspects it might be the other way round.

For queries on employment, self employed and consultancy status feel free to get in touch with us at 01225 632240 or at info@renneyandco.com.

Share this post

Sign Up to Our Newsletter

Share this post

Twitter

Directors, take note and consider your conduct carefully - you may not be immune from personal liability for unfairtwitter.com/i/web/status/1…4M

Twitter

Latest blog post is up: Employer references - are you aware of the legal requirements regarding work references?twitter.com/i/web/status/1…CT

Twitter

Employment tribunals have increased 30% since last year, which means delays for both employees and employers. If yotwitter.com/i/web/status/1…89

Testimonial

I would like to thank you for your advice and assistance on this matter. I was more than satisfied with your service and have already recommended you to an ex colleague.

Client on 17th March 2015

Testimonial

Thank you for your advice and expertise as well as your kindness and support. You have made a considerable difference to the way I have managed this experience and I am grateful that I found you! I won't hesitate to recommend you if the need arises.

Client A