AAT is calling on the Office of Tax Simplification to allow taxpayers to elect to be either employed or self-employed. This would create improved tax certainty for employees and employers, while simultaneously addressing the issue of employment status and rights.
AAT said, in a call for response to a claims and elections review that it would help HMRC identify fraud more easily if both the employer/engager and the individual taxpayer was required to report.
It would also remove the need for the controversial IR35 legislation, along with the CEST tool that is currently required for employment status determination.
The concerns about differing NIC rates of contributions is also now likely to become redundant in the wake of the Covid-19 outbreak. The Chancellor has already acknowledged these distinctions will probably have to go, or at least be significantly reduced in the future.
AAT noted that some workers will have more than one job, or more of which may be self-employed, others employed. However, it points out this system already operates successfully in countries such as Germany.