§ Mr. David Howellasked the Chancellor of the Exchequer (1) whether he will now review current tax arrangements for encouraging self-employment; and if he will make a statement;
(2) what representations he has received concerning the current Inland Revenue rulings determining the status of a taxpayer as between being employed or self-employed; and if he will make a statement;
(3) whether he will publish a list of the basic rules and procedures by which the Inland Revenue determines the status of taxpayers, for both tax and national insurance purposes; what plans he has for amending and relaxing these rules, in the light of Her Majesty's Government's policy of promoting self-employment; and if he will make a statement;
(4) what plans his Department has for promoting self-employment through changes in taxation policy and tax administration.
§ Mr. LawsonSince this Government came to office, the number of self-employed people has risen by more than 800,000; an increase of almost half. This reflects the success of the Government's measures over the whole range of policy and administration.
Whether an individual is self-employed is a question of fact and of general law. Essentially the question is whether someone is in business on their own account. In the vast majority of cases, the rules provide a straightforward answer.
We have taken a number of steps to provide, in plain words, clear guidance on the rules, to ensure greater consistency of approach between Government 626W Departments, and to reduce the administrative burden on individuals. Copies of pamphlet IR 56 which the Inland Revenue published last year to help any taxpayers who are in doubt whether they are employed or self-employed have already been placed in the Library.
Our consistent objective has been to encourage genuine self-employment and to help people to set up their own businesses.