I hoped I was too experienced to be angry but I fear my three score years and ten has resulted in outrage at the backward facing support groups who campaigned in California this week. Before you leave in droves I am not referring the the US elections!
The working landscape has changed beyond all recognition, as a fledgling engineer in 1971 I could walk from job to job increasing my pay rate on each move, even then I never considered being in a position long enough to accrue holiday pay and taking time off for illness was unheard of. Over the next four years I monitored where I could aspire to be in my middle age, the manager had a Rover P3, the owners drove old worn out Jaguars, that was not for me I left in 1975 to start my own business.
However back to the topic, the case surrounds a ballot (given the name Proposal 22) to realign workers already falling foul of the AB5 legislation which mirrors our own IR35. The result was 58% in favour of the Proposal 22, which allows ride hail apps and many other individuals to maintain their independence. Depending on whether you read the New York Times or the Washington Post opinions differ, they vai between those who see the emerging Gig economy as a violation of a workers rights and those who embrace the freedom and independence they offer.
I could argue long into the night on the merits of being Self Employed, but just hold that thought while I touch on what, in particular our own UK Government proposes with IR35. The heading “Dark Satanic Mills” is not meant to be derisory but more reflecting a particular period, it refers to the appalling working conditions workers endured during the Halicion days of the Victorian Industrial Revolution. No I’m not going to bang on about children up chimneys and down mine shafts but more on the subservience of one to the other. Nothing has changed, an employer still provides patterns of work that produce a profit, be that manufacturing, services, professions or retail. Wage rates have to equate to a profitable margin, taking all costs into consideration, which are; 1. The pay rate, 2. The employers NIC, 3. The Pension contribution, 4. the insurance cover, 5. The subsequent levels of supervision from one, to fifty thousand employees, 6. The HR department and so on. The conclusion being the Mill owner turns a profit and the worker retains some security based upon his or her ability to perform.
Times have changed but the fundamental principles are still the same, the greatest change has been in job security, employees can’t look forward to many rewarding years with one or two employers in their working life, the emphasis is on adapting quickly as working patterns change. The Chancellor and the Treasury has a firm view that “Tax At Source” will solve their budgeting dilema, enforcing IR35 will push thousands of independent workers into PAYE inevitably crippling industries which rely on a flexible workforce. RTI was introduced to follow employees while navigating several jobs in a any single tax year, but it remains the one thing it can’t do, changing jobs “in year” will result in confusion, only resolved in the following year by demands for unpaid tax and NIC as a result of workers holding several employed positions within the tax year, derived from contradictions in RTI filings. One BR per Individual shared over several RTI platforms leaves the client/taxpayer in a the turmoil of emergency taxation at worst, or low incorrect taxation within the year.
I have a suggestion, very similar to my last post; what was all the CJRS, JSS, SEISS about? SSP existed already! and just needed careful integration and the lifting of payments to reflect actual loss of earnings due to illness or incapacity, to include also the numbers of low paid workers and self-employed who are denied SSP, thus automatically assisting 100% of the UK workforce; No “Think Tanks” and late nights for the Chancellor. So P22 produced a resounding “yes” to retain the independent status of workers in California, the UK Government could forget the RTI malfunction and allow end users to hire who they prefer, to fit both demand and profitability within a trading year. From the 90’s Gordon Brown’s IR35 has grown up into a monstrous club to cajoul entrepreneurial, enterprising individuals into the PAYE system, and Chancellor if you are so worried about the tax position, align your existing ITA, ITEPA and ITTOIA to reflect the diversity in the working environment and cater for emerging new areas of income.