Just a quick personal observation based on advising members, but also helping family members with personal employment issues… I think everyone overestimates the degree to which workers are actually the robust rational actors that some policy-makers think they are.
People who work through Umbrella Companies are a case in point. We will soon have some evidence here, when we look at how far these arrangements rub up against the IR35 changes – I’m speaking to members who have been employed through complex employment intermediaries (though, to be clear, not umbrella companies) – the end-engagers then decide that the person in question is ‘caught’ by IR35, they start to pay them Net (ie. less tax, NIC, pension etc deductions) and then their Personal Service Company pays the actual worker having paid corporation tax, capital gains tax and any income tax and NICs that are due (tho employer NICS are usually avoided by this arrangement which is the reason it exists in the first place).
Obviously, once people figure this out, they will opt-out, but many people in these situations are completely phased by the complexity and I bet that there will be many people who end up being ‘taxed twice’ for a long time after this April….