[Netherlands] Audit office criticised for failing to tackle pseudo-self-employment

In the Netherlands, the national audit office Algemene Rekenkamer has criticised the tax department for failing to take action against pseudo-self-employment, saying few companies and freelancers face checks, DutchNews reports.

The audit office analysed 1.1 million freelancer tax returns and said in its report that the chance of catching people who act as freelancers but should be considered regular workers is low. This is partly down to a moratorium on active checks as well as a shortage of qualified staff, according to the audit office. 

The self-employed pay less tax and premiums than people in regular employment while the companies which use them do not have to pay premiums on pension contributions on their behalf. This, the audit office said, is distorting the labour market. The problems reportedly date back to legislation introduced in 2016 which replaced the VAR freelance declaration and was supposed to tackle pseudo-self employment by making client and freelancer jointly responsible. However, the law received so much criticism that it has never been formally enforced and tax inspectors are still limited to making checks in specific cases only. 

In the two years to the end of last year, tax officials visited just 475 companies to check up on their use of freelancers and identified only four potential infringements, the audit office said. 

Questionnaire 

Enforcement efforts currently focus on an online questionnaire via which client and contractor can determine whether their working relationship is an assignment or an employment contract. Yet this too is rarely used and has been criticised for failing to provide clarity. Reacting to the news, tax minister Marnix van Rij said that he “recognises the problems” and will take them seriously. The audit office report will also form part of government plans to reform the Dutch labour market, he said. Unions have resorted to legal action to tackle pseudo-self-employment at gig economy platform companies like Uber and Deliveroo and, in several instances, the courts have ruled drivers and delivery riders should be considered regular employees.

Source: DutchNews

(Quote via original reporting)

In the Netherlands, the national audit office Algemene Rekenkamer has criticised the tax department for failing to take action against pseudo-self-employment, saying few companies and freelancers face checks, DutchNews reports.

The audit office analysed 1.1 million freelancer tax returns and said in its report that the chance of catching people who act as freelancers but should be considered regular workers is low. This is partly down to a moratorium on active checks as well as a shortage of qualified staff, according to the audit office. 

The self-employed pay less tax and premiums than people in regular employment while the companies which use them do not have to pay premiums on pension contributions on their behalf. This, the audit office said, is distorting the labour market. The problems reportedly date back to legislation introduced in 2016 which replaced the VAR freelance declaration and was supposed to tackle pseudo-self employment by making client and freelancer jointly responsible. However, the law received so much criticism that it has never been formally enforced and tax inspectors are still limited to making checks in specific cases only. 

In the two years to the end of last year, tax officials visited just 475 companies to check up on their use of freelancers and identified only four potential infringements, the audit office said. 

Questionnaire 

Enforcement efforts currently focus on an online questionnaire via which client and contractor can determine whether their working relationship is an assignment or an employment contract. Yet this too is rarely used and has been criticised for failing to provide clarity. Reacting to the news, tax minister Marnix van Rij said that he “recognises the problems” and will take them seriously. The audit office report will also form part of government plans to reform the Dutch labour market, he said. Unions have resorted to legal action to tackle pseudo-self-employment at gig economy platform companies like Uber and Deliveroo and, in several instances, the courts have ruled drivers and delivery riders should be considered regular employees.

Source: DutchNews

(Quote via original reporting)