Alarm over Labour not ‘proceeding at pace’ on Single Worker Status
The Employment Rights Bill is keeping SWS on the shelf, much to the benefit of the unscrupulous and their ‘shuffling,…
Experts echo Kingsbridge’s assessment that confusing research about complex rules deserves clarity. Or at least a conversation.
Three things are clear about new ‘unclear’ Employment Status research by HMRC into employment status in the UK.
First, the research – a survey designed to produce an estimate of the UK’s ‘worker’ population with a follow-up qualitative study of the respondents – is tricky to read.
Second, ‘worker status’ is tricky to understand, particularly for employees, some self-employed, and even for HMRC insofar as proving it definitively.
Third, the ambiguity over status is cause for Labour to stop stalling on ‘single worker status,’ or to restart talks about the need for change.
‘Employment Status in the UK – research and analysis’
Here, these three clear areas will be explored – or at least, the IR35 insurer and status experts they quizzed yesterday deemed them to be ‘clear’.
The experts who exclusively shared their insights about HMRC’s “Employment Status in the UK – Research and Analysis,” were:
- Meredith McCammond, Technical Tax Officer at the Low Incomes Tax Reform Group (LITRG)
- John Chaplin, Employment Tax Partner at BDO
- Andy Chamberlain, Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE)
- An anonymous adviser who declined to be named
Before more detail on the three areas, here’s a summary of its four key findings to help make the HMRC research easier to grasp (the survey and qualitative research adds up to 41,000 words in length).
Summary of HMRC’s Employment Status in the UK research: 8,767 people surveyed – four key findings:
- 57% of individuals in the UK have “assigned status” – 52% as employees or workers + 4% as self-employed
- 24% of individuals have “unassigned status” – out of these 2,104 individuals, 38% have “undetermined status” (equating to 9% of the total 8,767 respondents)
- Out of the 2,104 individuals with “unassigned status”, 6% were deemed likely self-employed; 55% were deemed likely workers
- 20% of individuals (out of the total 8,767 respondents) are not in work so were excluded
These four findings from the research may appear applicable to the UK workforce today, given that they were published by HMRC on May 27th 2025.
‘Fieldwork – from two years ago’
However, the “fieldwork” of the survey was carried out in May-June 2023, meaning the four key findings are already two years’ old at the time of publication.
Kingsbridge invited HMRC to comment – the tax authority explained that there’s no particular reason for the findings being published two years after they were collected.
Of the two HMRC documents, the qualitative research (‘the study’) is arguably the easier to digest, as has five chapters whereas the survey has 13 chapters.
‘How to read this report’
But the HMRC-commissioned study has one section titled “How to read this report”.
And as many as five status experts yesterday indicated that never has a helping hand to get through a piece of research been more necessary.
“As an adviser on IR35 to a provider of insurance, I’m rather au fait with long, text-heavy documents.
“But this HMRC ‘research and analysis’ paper is incredibly tough to read and follow”, says Kingsbridge IR35 Project Manager Ryan Dawson.
“I’m aware ‘How to read…’ is just an HMRC subheading. It’s in a 2019 HMRC study also counting ‘worker status’ individuals, for example. But how necessary its inclusion is here.
“And I know the new study has three stated aims. But after reading its 11,000 words, the study smacks of research for research’s sake, devoid of clarity and clear objectives.”
‘A struggle to discern key findings’
Meredith McCammond also regularly tackles weighty tax documents. But she signalled that “Employment Status in the UK: qualitative research” is up there with the heaviest of them all.
“This HMRC paper may be one of the hardest things I’ve ever had to read”, LITRG’s Technical Tax Officer acknowledged to Kingsbridge.
“I fear many people will skim-read it. I’m still struggling to discern the key findings.”
‘Worker status doesn’t exist for tax purposes’
A former expert witness to a House of Lords committee on off-payroll working, McCammond struggles, too, with the thinking behind the research.
“I’m slightly perplexed as to why HMRC has commissioned a survey about worker status – when it doesn’t exist for tax”, she told Kingsbridge.
“I suspect it is because HMRC has some concerns about how this group is dealing with their taxes, if they aren’t on PAYE.”
HMRC: ‘Our research is designed to learn more about UK population with worker status’
A statement obtained yesterday from HMRC probably won’t assuage McCammond’s concerns that the research could be a precursor to HMRC moving to swell the PAYE population.
Asked about the research, an HMRC spokesperson told Kingsbridge:
“We regularly commission independent research on all aspects of the tax system.
“This research was commissioned simply to learn more about the worker population and their understanding of employment status.”
‘Much lower undetermined rate than Check Employment Status for Tax (CEST)’
Told that some advisers are scratching their heads at the HMRC survey-study combo, BDO’s John Chaplin confessed last night that he “too” is “struggling to understand…[its] rationale”.
The Employment Tax Partner worries that 24% of Britons have “unassigned status”, with 38% of those having “undetermined” employment status.
Mr Chaplin says: “If my maths is correct, that equates to just 9% of respondents with indeterminate status. That’s a much lower ‘undetermined’ rate than CEST!”
‘Too many caveats’
The author of CEST Explained (a book explaining how to use the HMRC tool to test IR35 status), took to LinkedIn as soon as the HMRC research and analysis was released.
In her May 27th post, Rebecca Seeley Harris said that while she was “sure” it must have some “interesting” findings, she hadn’t summoned up “the will” to read the documents.
After reading it, ReLegal Consulting’s boss reportedly described the research as seemingly not “particularly helpful” due to “too many caveats”.
Asked by Kingsbridge if they agree, one tax expert mused that they didn’t know, saying they started to read the documents but had to ‘lie down and put a cold flannel on [their] head’.
Aside, then, from clearly suffering from accessibility issues, the HMRC research “unearths that employment status isn’t well understood by people”, says Kingsbridge’s Mr Dawson.
‘Low understanding of employment status’
Difficulty understanding status is the second clear takeaway of the unclear HMRC research, according to the status advisers.
“Both in a general sense and in relation to their own job, HMRC’s researchers found a ‘low understanding’ of status”, continued Mr Dawson.
“Similarly, with only 6% identified as “likely self-employed” and 38% within an unable to determine [status] category, we’re probably seeing a reflection of just how complicated employment status really is.
“So whether it was intended by HMRC or not, this research provides an insight into how difficult HMRC’s own status experts make it to be classified as ‘likely self-employed’.
“Such difficulty may go some way to explaining why one respondent, who previously provided services as a limited company, doesn’t now regard themselves as an employee, despite currently operating as ‘inside IR35’.”
‘Worst-of-both-worlds scenario’
A worried Andy Chamberlain, IPSE’s Policy Director echoed: “This latest HMRC research further confirms that for many people, their own employment status is unclear.
“This means some are not receiving the employment rights they are entitled to, and some may not be paying the correct tax.
“There will be some who are in the ‘worst-of-both-worlds’ scenario – overpaying tax and still not receiving rights.”
‘Surprising to think anybody but self-employed would understand employment status’
The expert who asked not to be named said that they weren’t sure about the taxpayer value for money of the HMRC research.
The Revenue has already been told “for years by us” that changes to status are the source of angst over paying bills and mortgages – precisely as the survey found in a “behavioural” close-up.
The expert added: “I’m not sure HMRC needed to commission research to find this out. I’m also surprised it thought anybody but the self-employed would have any understanding of status.
“I don’t think I know a single person who is employed that really cares or wants to understand what makes them employed. And they’re even less interested in self-employed status factors.”
‘Employment status should be understood by a reasonable person’
In the research, both traditional workers (such as employees) and non-traditional workers (such as contractors) believed “worker” had manual connotations, whereas “employee” implied an office job.
Mr Dawson says Labour should be aware of how far misunderstanding of status has built up.
Touching on the third takeaway from the HMRC survey-study release – that the ambiguity over status is cause for the government to act – he comments:
“Employment status…at the very least for those who are self-employed and the end-hirers who engage them, should be something that a reasonable person can understand.
“Everyday people should be able to apply and live with the framework that they’re given. Instead, under IR35 especially, we have uncertainty facilitating risks that many engagers just don’t want to take.”
‘Labour should now bring employment status review forward’
After reading both HMRC documents, IPSE said that the time for ministers to intervene was now.
The association’s Mr Chamberlain told Kingsbridge: “The government should now bring forward its planned review of employment status to ensure individuals receive the rights they are entitled to.
“[Despite apparently making up only 6% of the respondents in this research], genuinely self-employed traders need peace of mind so they can focus on their business.”
‘Blunt instrument that should not determine HMRC compliance activity’
IPSE’s Policy Director isn’t alone in having a critical eye on the HMRC research while at the same time trying to look to the future.
“The questions used to determine these scores are only a simplified version of the wider employment status questions typically required”, began BDO’s Mr Chaplin.
“I’d hate for this research to be used as a blunt instrument in determining future legislation, [or HMRC] compliance activity.
“Hopefully, this research will only be used to consider whether further, more detailed work is needed, and not as the definitive view of employment status in the UK.”
‘Treasury minister James Murray MP firmly focused on closing tax gap’
At LITRG, its Technical Tax Officer reiterated her fear that the research may be used to expand the PAYE system.
“It’s already well-known that employment status is really complicated.
“Given we have an Exchequer Secretary to the Treasury, [James Murray MP], who is firmly focused on [closing] the tax gap, the greater significance of this research might be that HMRC now has to start doing some creative thinking about how to get more individuals into the relatively safe harbour of PAYE”, Ms McCammond said.
‘Exciting’
“The ‘what they do next’ is actually the exciting part”, argues an optimistic-sounding Mr Dawson.
“Not that ‘Next steps’ or ‘Policy recommendations’ are one of the research’s three objectives.
“HMRC lists those as uncovering what’s behind more or less traditional working practice motivations, how well employment status is understood, and thirdly, what behavioural changes would occur if working practices or employment status rules changed.”
‘HMRC’s unwieldy research should shine a light on employment status complexity’
Alluding to comments he made back in April, Dawson concluded:
“We’ve already spoken about Labour’s ambitious plans to simplify employment status and the lack of noise since their election campaign on this.
“If nothing else, our hope for this unwieldy research from the taxman is that it shines a light on employment status complexity.
“It should restart the conversation about the need for change. And Labour should know it’ll have support – most advisers in this space would likely back a simpler system and set of tests with which determining employment status can be made less opaque and not as mind-boggling to fathom.”
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Simon Moore, Managing Director at Moore News Ltd
Simon Moore is a journalist with NCTJ-approved journalism training, who has worked inside the newsrooms of local, consumer and national media titles.
He today writes news and features for trade publications specialising in freelancing, small business and the self-employed. Simon’s articles have been linked to by The Daily Telegraph and the biggest newspaper website in the world, MailOnline. He was appointed to be a judge at IPSE Freelancer’s Awards 2023.
