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Thu 23rd Apr 2015 That is if the Office of Tax Simplification gets their way. In a report published earlier this year, the OTS stated that more needs to be done to help determine whether a person is an employee or self-employed for the purpose of taxation classification. As the number of people challenging the standard working relationship and exploring ways to manage their own work life balances, the issue of defining the status of a contractor is becoming increasingly important. However the challenge of finding a defining principal is still proving elusive. A single reliable method of determining employment status that is all encompassing has never been achieved before. Different test are applied by different offices – for example tax, pensions or employment law. Whilst the Office of Tax Simplification suggest the indicator used by HM Revenue and Customers was worthy of consideration further amendments are essential to make the indicator a reliable resource that can be universally applied. The importance of defining a person’s status comes down to the tax that they pay. Currently those in employment are treated differently to those who are self-employed, and significant differences were found in relation to employers NIC’s. By using outdated processes to define the new modern ways of working clear gaps in the ability to pigeon hole different types of worker have appeared and workers do not sit comfortably in the current system. The report considered short and long term options to better help businesses and individuals – such as a helpline in the short term, but with a view to combine the payment of income tax and national insurance contributions in the longer term. By aligning tax and NIC rates, alongside benefits that these two groups of workers receive, the need to so clearly define the roles becomes less imperative. The report identified a requirement for all aspects of employment status to be held in a centralised "employment status portal", that’s harmonises both tax and employment rights. A third option that creates a new segment all together that creates a new status that sits alongside employed and self -employed was also mentioned however this was not expanded upon so quite how this would work or what the status would mean is open for debate. So whilst the report has invited debate, it has not heeded any glimmer of clarity for employers or contractors to help determine their working status. Return