The Liberal Democrats have proposed new legal tests for establishing employment status and for a new dependent contractor category to be introduced. The dependent contractor category was proposed by the Taylor Review of modern working practices.

The Lib Dems believe that employment status should be based on things such as the degree of employer control or by thresholds on income and hours. The tests would then permit users to be placed below or above the thresholds to determine their status.

The Lib Dems also want to define self-employment. These ideas are more in line with what contractors themselves have been calling for. Contractors would like to see the Business Entity Tests discarded and the CEST has already come in for criticism for being inaccurate.

The Lib Dems were meeting at their Bournemouth conference where a motion was passed calling for ‘updating the current legal definition of self-employment” to ensure it reflects “the 21st century economy and modern technology.”

The party also wants to introduce other recommendations made by the Matthew Taylor review which the party broadly endorses.

In a statement, the Lib Dems acknowledged that “self-employment often acts as a springboard for more ambitious forms of entrepreneurship.” The Lib Dems also acknowledged that those who are self-employed often get more job satisfaction than those who are employees.

The party also wants to make other reforms which would have an impact on contractors. The party would like to reform the corporation tax system so that it benefits smaller companies more. The party is sympathetic to taxing companies based on their turnover.