Description:The purpose of the consultation process, initiated jointly by the Department of Finance and Department of Social Protection in relation to the proposed revision of the tax treatment of self-employment arrangements, which closed on the 31st of March 2016, was to consider measures to address the loss to the exchequer that may arise where an individual “who would otherwise be an employee” establishes a company to provide his or her services. A range of options to reclassify such individuals for tax purposes are proposed as part of the consultation paper issued last January.
Implication(s):In its response, Ibec has explained the legal complexities involved in determining an individual’s employment status. Ibec has also highlighted that many of the examples provided in the consultation paper represent legitimate commercial activities which would not meet any legal test of a contract of employment. Based on feedback from members, it was also made clear that much project led work across a range of sectors in the Irish economy would not be possible without the flexibility that the use of independent contractors provides.
Where such arrangements are exploited, there are already mechanisms in place to address the question of whether an individual arrangement amounts to what is often described as “bogus self-employment”. Ibec respectfully submits that these mechanisms should continue to be utilised rather than the introduction of a blunt instrument which would stymie innovation and restrict those operating small businesses in good faith
Current Position:Ibec has raised serious concerns as part of a consultation process initiated jointly by the Department of Finance and Department of Social Protection in relation to the proposed revision of the tax treatment of self-employment arrangements.
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