Chartered Accountants Ireland, as a member of CCAB-I, has responded to the consultation on intermediary type structures and self-employed arrangements. In the submission, we set out that modern day work practices are a reflection of commercial factors such as the need for flexibility for businesses and workers rather than tax or social insurance avoidance schemes.

The consultation was launched by the Minister for Finance and Minister for Social Protection. Interested parties were invited to make submissions on possible measures to address the loss to the Exchequer that may arise under arrangements (i) where an individual, who would otherwise be an employee, establishes a company to provide his or her services, and (ii) where an individual, who is dependent on, and under the control of, a single employer in the same manner as an employee, is classified as a self-employed individual.

The key points we made in the submission include:

• The tax and social insurance system is currently less favourable to the self-employed compared to employees. We suggest the focus should instead be on establishing a new optional PRSI rate for the self-employed to offer some of the benefits which they cannot currently avail of, in particular the jobseeker’s benefit.
• The Irish social insurance system and the income tax system does need to build in recognition of the fact that the world of work has changed and the activities of some workers no longer fit into tidy categories of employee and self-employed.
• Reform of how PRSI is collected cannot be carried out without reforms to the structure of entitlements which flow from the contributions.
• As part of the fundamental reforms required for PRSI, both the collection and the refund of overpaid PRSI should be conducted by the same government body.

You can read the full submission here.