PolicyLens

Methodology note

Create a single worker status: calculation note

Scenario estimate showing gross costs, offsets and behavioural uncertainty; not an official costing.

View main policy page: Create a single worker status

Central fiscal result

+GBP 0.6bn - Net public-finance impact in 2027-28

Low case: -GBP 2.0bn. High case: +GBP 5.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Replace employee, worker and dependent-contractor boundaries with one core employment status.
  • Baseline is current law and published official data unless stated.
  • Private business costs are excluded unless they affect tax or procurement.
  • Target year is 2027-28, with later years shown separately.

Affected population

  • Unit is workers/contracts, not employee jobs.
  • Central exposure is 1.5m dependent or insecure workers.
  • Employee and tax status are not identical.
  • Public procurement exposure is partial.

Gross impact

  • Central affected population is 1.5m workers/contracts.
  • Employer-rights cost uses GBP 1,200 per affected worker.
  • Public procurement exposure adds GBP 0.60bn.
  • Possible tax recategorisation offsets GBP 1.00bn centrally.

Fiscal build-up, central case

  • Employer-rights cost in public/procurement: +GBP 0.90bn
  • Tribunal and enforcement costs: +GBP 0.25bn
  • Public procurement pass-through: +GBP 0.60bn
  • Tax-status receipt gain: -GBP 1.00bn
  • Benefit and wage-tax offsets: -GBP 0.15bn

Central net impact: +GBP 0.6bn in 2027-28.

Behaviour and pass-through

  • Low case assumes tax alignment raises receipts.
  • Central assumes partial tax recategorisation only.
  • High case assumes high public pass-through and disputes.
  • Employers reduce some marginal contracting.
  • Some work shifts into genuine self-employment.

Phasing

  • 2026-27: +GBP 0.2bn. Guidance and disputes.
  • 2027-28: +GBP 0.6bn. Main status change.
  • 2028-29: +GBP 0.8bn. Case law develops.
  • 2029-30: +GBP 1.0bn. Contracting model adjusts.

Main source groups

  • S1: S1 Taylor Review: unclear status is a core modern-work problem.
  • S2: S2 HMRC: tax and employment statuses are distinct.
  • S3: S3 ERA analysis: rights costs are concentrated in flexible employers.
  • S4: S4 Tribunal stats: open single-case load was 58,000.
  • S5: S5 Autor/Kerr/Kugler: protection costs can reduce productivity.