After an independent fiscal watchdog warned that a rising trend in incorporations may cut tax revenues by £3.5 billion a year by 2021, the UK government is to review how the tax system treats income from employment, self-employment, and incorporated businesses.
Rapidly rising self-employment and the incorporation of small businesses erode tax revenues, Chancellor Philip Hammond said as he delivered his autumn statement on November 23. The government will consider “how we can ensure that the taxation of different ways of working is fair between different individuals and sustains the tax base as the economy undergoes rapid change,” he said, adding that it will consult on any proposed changes.
The government said several factors have contributed to a deterioration in the fiscal outlook since the March 2016 budget.
Read more: My news story for Tax Analysts, 29 November (paywall).
Government starts review of ‘gig’ economy (BBC News, 30 November)
Gig economy threatens government finances, says May adviser (Guardian, 30 November)