Gig economy faces tax hit

Posted on 23 Mar 2016
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 Gig economy firms face tax hit

Businesses in the gig economy would have to pay more tax under proposals put forward by the Taylor review of modern working practices. The review recommends firms which have a "controlling and supervisory" relationship with their workers should pay a full range of benefits and NI contributions, and says workers for firms such as Uber and Deliveroo should be classified as dependent contractors. The review also called for cash-in-hand employers to switch to online systems such as PayPal, amid suggestions that cash-in-hand costs the UK £6bn of tax a year. Matthew Taylor, the report’s author, said the proposals would be “the most radical reform of employment rights in a generation” if they were all adopted, but the CBI said “a number of proposals in the report will be of significant concern to businesses”. Theresa May said the government would carefully study the review’s recommendations but stopped short of promising new legislation. The FT welcomes the report’s recommendations for tax reforms, but the Telegraph’s leader says the review should not be used as an excuse to hike taxes. The Telegraph’s Jeremy Warner warns that the proposal to tax gig economy growth could stifle the economy, while Lex in the FT says the recommendations will ultimately mean little for most large established employers.

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