I studied with obvious interest the summer budget, and focused particularly on Chancellor Osborne’s ideas about employment taxes. It seems the Treasury is still preoccupied with employment status, with its talk about ‘…how two individuals doing the same job, in the same way, can end up paying the different levels of tax’.
This ties in with views on employment status published by the Office of Tax Simplification – which it sees as problematic to business because:
I’ve already communicated my views to the OTS (and continue to await a response) but for what it’s worth, here’s what I think the organisation needs to know about the construction industry and the freelance builders who work within it:
There’s also one glaring omission from this simplified analysis – an aspect the Chancellor also mentioned in the budget – and that is productivity.
Ask any construction professional why there are many freelancers on building sites and you’ll hear the same three answers over and over: Productivity, de-risking of projects, and cost management.
Productivity is the differential between two people doing the same job. And that is what justifies the tax differential. Freelance builders working on measured rates achieve higher productivity than those on PAYE . . . their higher productivity is a direct outcome of their right to opt for self-employment.
Construction couldn’t function without the individual contributions freelance builders make. If it weren’t for them the industry would be smaller, less efficient and inflexible
Read the full report here