The question of how the tax regime should adapt to reflect modern working practices is a difficult one. There has been a rise in the number of self-employed since 2000 (which interestingly predates the GIG economy) but the average profits of the self-employed has been falling since 2002. The Institute of Fiscal Studies, in its recent report Who are business owners and what are they doing, describes the stereotypical sole trader business as being one that will survive for less than 5 years, will create an income that is well below the average for employees and neither invests nor employs others. The average annual profit from these businesses is just £12000, with 36% making less than £10000. There are therefore many self-employed individuals who earn significantly less than the average employee.

The tax and National Insurance treatment of the employed and the self-employed is, of course, very different. Employment law has developed a concept of “worker”, that sits between employee and the self-employed, and some might argue that tax should follow this lead. Others suggest that the digital platforms which provide many of these individuals with work should be operating a PAYE-lite regime, deducting income tax at source - although this raises the question of what rate of tax should be deducted from gross income, given that the deductible expenses incurred by the individual will vary.

A middle way – which should be more palatable to the platforms – would be for them to provide the worker and/or HMRC with the relevant information, which, when combined with the making tax digital project, should make it easier for these individuals to comply with their tax obligations, without the need for tax advice, which is unlikely to be available to low-earners. And perhaps in time this model would also be more appropriate for employees too?