HC Deb 22 December 1983 vol 51 c559
17. Mr. Neil Hamilton

asked the Chancellor of the Exchequer if he is planning to introduce new guidelines to tax offices on the procedure for classifying people as working on contracts for services or working on a contract of service.

Mr. Moore

The guidelines and advice issued to inspectors of taxes by the Board of Inland Revenue are based on criteria which the courts have independently decided are relevant for distinguishing between contracts for services and contracts of service.

Mr. Hamilton

As my hon. Friend kindly met a delegation from the Institute of Directors, including myself, last Tuesday, he will be aware that there is considerable disquiet among the self-employed and in the small business community about the Inland Revenue's policy on reclassification. Will he instruct the Inland Revenue not to seek to reclassify taxpayers out of self-employment, thus imposing the burdens of PAYE upon them, purely for reasons of the Revenue's administrative convenience? One of the best ways to counter unemployment is to encourage self-employment. Any tax policy which would counteract that trend would be counter-productive.

Mr. Moore

My hon. Friend will be aware from the meeting to which he referred that the duty of the Revenue is to interpret the law correctly. I know that he will also be delighted that the figures for self-employment for the past four and a half years show that the number of the self-employed has increased from 1.9 million to 2.3 million.