Government's Taylor Review proposals will inevitably lead to increased costs for employers

Commenting on the Government’s response to the Taylor Review, Bill Longe, head of employer tax at RSM said:

‘Today’s Government response to the Taylor Review will inevitably lead to a shake-up in the UK labour market - but not just yet. 

‘There will now be a period of consultation and reflection which may in due course result in some of the more eye-catching measures being watered down. 

‘In the long run however, it is fairly certain there will be changes in the way workers are engaged, particularly for workers who are self-employed or in in the gig economy. 

‘However, for employers, while there may be benefits in terms of greater clarity, these changes will inevitably result in increased costs and an increase in administrative burdens despite Government assurances to the contrary. The increase in regulatory oversight required will also demand greater resources from the public purse.

‘There has recently been a significant increase in the self-employed populace in the UK who now number some 5 million people. Yet there is a significant disparity between the £240 per week average pay of someone who is self-employed versus the £400 per week average for those who are employed. Today’s measures could feasibly reverse the recent trend and result in more people going back on the payroll.’