4 minute read
As clear as mud
SORRY ABOUT THIS, BUT I AM going to overshare with you today. I am normally a very well-behaved advisor, always trying to offer you some trade relevant stuff from my world, but today I am just going to moan.
Professional Driver kindly allows me this column to offer hope and optimism in a world of increasing regulation and compliance. But today I offer no solutions, just a little rant. Here goes…
I’m sure as most of you know that as well as doing lots of the tax stuff that I do, I am very involved in looking at driver engagement within the trade. I would like to let you in on a little secret. If you thought driver status was complicated, you have got it wrong, I’m afraid.
The law and folklore, legal precedent and just plain gossip surrounding what is and what is not self-employment is actually excruciatingly, mind-bending obtuse and frustrating.
You may, or may not, realise that selfemployed engagement rolls into two separate areas: tax and employment. Both are covered by separate areas of legislation, separate courts and separate tests. Many company owners are not aware of the difference, though to be fair, that’s my job!
Also, in terms of skill sets for advisors, one leans towards lawyers and one towards accountants, and worse still there is constant crossover in how they are dealt with, and in my experience no matter how good they are, the convergence of these two states of play can trip any advisor up.
IR35, status tests, intermediary reporting, agency legislation, Section 44… the list goes on and on of terms and potential problems and, of course, misunderstandings. So, you can see why I was so excited when finally, the Department for Business, Energy and Industrial Strategy issued new employment and status guidance.
Its bold promise was to “provide additional clarity for businesses, individuals and other groups such as those in the gig economy, so they have a better understanding of which employment status for employment rights they fall into”.
So here goes, here is the clarity we have been waiting for: “A large number of respondents were supportive of employment status reform but there was no overall consensus on what action the government should take. Respondents agreed that there was no easy solution, and it would be complex to implement any reform around employment status.”
And here is an example of specific advice given: “Multiple apps or platform-based systems. When an individual uses multiple apps or platform-based services simultaneously then the arrangements for each app/platform will need to be considered on an individual basis.”
You may well be able to see where I am going with this. The guidance was there to attempt to demystify the law. From my perspective, it was totally aimed at employment and status and not on the tax implications, so the jury is still out on the future of tax implications recently talked about in the trade.
So in effect, after four years. this government has decided not to legislate formally in this area. They chose instead to once again issue guidance, meaning ‘suggestion to courts not direction to courts’. So once again advisors such as myself our left to our wits and dare I say guile, in stomping our way through the mire.
I’m sure I will be writing lots more about this guidance in the next few months. But sorry, there are no epoch-making laws for you this time.
I shall leave you with this quote from Employment status consultation: government response (publishing.service.gov. uk)
AND FINALLY…
My phone has been ringing lots in the last few days about a letter from TFL to lots of operators asking about “operator and passenger contractual relationships”, referring directly to the “December 6, 2021 Divisional Court ruling” and asking for their contractual terms with proof that they apply to regulation 9(14).
This is essentially a licensing and legal issue, but I will of course have an opinion on it, especially the shamefully tiny deadline that everyone was given. I’m sure this issue isn’t anywhere near over.
