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Shadow Treasury Minister backs PRISM’s call for tax regime review

PRISM’s calls for a strategic review of the tax regime have been backed by a shadow Treasury minister. Shadow Financial Secretary to the Treasury, Rob Marris, wrote to the Chancellor, George Osborne, supporting the idea after discussions with chief executive, Crawford Temple. In his letter, Marris supported a review of the tax rules affecting flexible workers, referencing the confusion that reigns across the intermediary sector over employment status. He told the Chancellor, “I agree with PRISM that it is now time for HM Government to commission a strategic review of this type of work, in the hope that this will lead to clarity and a simpler tax system. “The Office of Tax Simplification (OTS) would be one choice to conduct such a review.” PRISM hopes a strategic review would result in a simplified tax system that properly recognises the unique way contractors are engaged. Until now, the UK tax system has only recognised workers in two traditional categories - employed and self-employed. Temple announced PRISM’s drive to secure a strategic review earlier this month. He said, “It’s fantastic that Rob Marris supports the idea and we thank him for meeting with us and writing to the Chancellor to that end. “We hope George Osborne sees the benefits for the whole country of a simplified tax system that gives all types of workers the proper recognition they deserve so they, as well as their clients and employers, know where they stand.” The Labour frontbencher’s intervention came after an independent review of self-employment for the Government highlighted the need for a simpler tax system. Entrepreneur Julie Deane, founder of Cambridge Satchel Company, urged ministers to act. She said in her report: “Taxation was repeatedly raised by all of those interviewed – as an administrative burden, a barrier to growth, and an issue that could benefit from improved simplicity and better advice. Given the scale of concern I recommend that Government looks at this in more detail.” In his letter, Marris outlined why a review was needed, highlighting the confusion that currently reigns across the intermediary industry. He stated, “For some workers, it remains unclear as to whether they are employed or self-employed. “The lack of legislative clarity over this distinction bedevils attempts to levy the right amount of tax, at the right time, and in the right way.” There are 4.6m self-employed in Britain but the growing ranks of contractors who fall outside this category now stand at a reported 1.6m. Temple added, “There is a growing army of flexible workers and, as a group, they are now too big for the Government to ignore. They are also incredibly important to our economy and should be recognised for the contribution they make. “A strategic review would likely be the first step on the road to a level playing field for all types of workers, including contractors.”

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