Alignment of Tax and National Insurance for employees and the self-employed?

27th March 2020

The Chancellor has announced a significant assistance package for self-employed individuals adversely affected by the COVID-19 crisis. Having spent considerable time devising a method of assistance for the self-employed, the Chancellor’s statement also included the intention to find an equitable balance between the employed and self-employed, once the immediate crisis is over. This is a potentially significant declaration and may see increased tax and National Insurance costs for the self-employed going forward.

What can we expect?

Nothing immediately: the Government’s priority is still to help provide stability, however, as part of the Government’s rescue package, the implementation of the IR35 rules for the private sector was put back until 6 April 2021.

The Government may consider this the right time to:

  1. Formally respond to the Taylor Report
  2. Consider the findings of the work carried out by the Office of Tax Simplification (2015)
  3. Look at modifying the IR35 rules
  4. Whether a statutory definition for ‘self-employment’ can be established
  5. Extending the National Insurance rules to cover dividends

The potential scope for any review will be extensive and will impact upon  a wide range of individuals and organisations which engage them.

Nick Bustin

Employment Tax Director
+44 20 7969 5578
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