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NIC regime encourages ‘false self-employment’

printer Mail

The Social Security Advisory Committee (SSAC) has expressed its concerns that the current structure of the NIC regime for the self-employed provides incentives for employers to encourage ‘false self-employment’ among their workers, and has called upon the government to review the comparative levels of social security contributions and entitlement between employees and the self-employed. The SSAC also believes that the introduction of new single-tier pensions and automatic enrolment are having a similar effect.

Launching the report, Social security provision and the self-employed, SSAC chair Paul Gray commented: ‘Our report highlights a number of differences in the treatment of self-employed and other workers within the current social security system. With the recent growth in self-employment, it is important for the government to review whether the right balance in the social security system is currently being achieved between those in self-employment and employment.
‘We do not underestimate the challenge policy-makers face in assessing the respective interests of the self-employed, the employed and their employers. However, within that analysis it will be important to recognise some of the drivers for “false self-employment”. The position may be further complicated following roll-out of Universal Credit for the self-employed, and we therefore call on the government to establish an expert working group to look carefully at concerns that are emerging.’