ATT Budget Representation - Employment Status

The ATT has submitted a Budget representation on employment status.

In our submission, we recommend that the government should consult with stakeholders on options to introduce a single common statutory framework for employment status in the UK. This is because the existing position is somewhat fragmented, based on a combination of tax legislation, case law and ad-hoc reforms. In some cases, similar circumstances can produce different results for tax and employment law purposes.

A common statutory framework similar to the Statutory Residence Test could bring clarity, on the treatment for most arrangements, that is consistent for tax and employment rights purposes, with very few differences. We also suggest that the government should overhaul the existing HMRC Check Employment Status for Tax (CEST) tool and introduce a replacement which can reflect the new test, giving an indicative position for most working arrangements.

Alongside introducing a common statutory framework for employment status, we also call on the government to consider whether decisions made in employment tribunals should apply for tax purposes and vice versa.