CIS Contractors

OTS Employment Status Review - IR35 & CIS

18 November 2014

Part of the HM Treasury, The Office of Tax Simplification (OTS), has launched an Employment Status Review.

OTS want to hear from anybody who has thoughts on areas where the tax rules regarding employment status are difficult to interpret or follow with the aim of making a clearer and fairer tax system.

Clearly for contractors, contractor bodies, umbrella companies and contractor accountants the main areas of concerns are IR35 and CIS (The Construction Industry Scheme). HOWEVER, the review specifically says it will NOT address either of these or expenses paid to employed or self-employed workers.

In the detail the OTS raise the question of whether there are 3 types of employment status: Employed, Self-Employed and the “3rd”, Freelancing (or Contracting). It also raises the complexity when applied to small businesses which freelancers often trade through and also where a person performs multiple roles how different roles can be treated differently i.e. one may be treated as employed while another self-employed.

All feedback should be made by 31st December 2014.