How the tax system is driving people into insecure work in unexpected ways

A guest blog in Touchstone by Meredith McCammond



I work for the Low Incomes Tax Reform Group, a group of tax and welfare rights specialists with expertise in the tax and related welfare issues of the low-paid. Often, people contact us describing their problems with tax, National Insurance, tax credits and interactions with other means-tested benefits. A good number of the problems have arisen in the context of non-standard ‘flexible’ forms of employment such as agency work, zero-hours contracts and self-employment.

What we are seeing in our work supports other evidence and research (including the TUC’s) showing that the numbers of people in such forms of employment are rising. While much intellectual debate to date has revolved around how National Insurance contributions reform might help reverse this trend, correspondence we receive into our mailbox from workers exposes that, in practice, there are wider aspects of the system driving workers into these precarious forms of employment.

We wanted to share this insight to help inform the debate and because, in our experience, reforms which tackle only part of the problem are rarely effective in the long term.

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