Treasury considering ‘mini-jobs’

In a bid to tackle the UK’s chronic unemployment problem, Chancellor George Osborne is considering introducing tax-free “mini-jobs”.

Modelled on a scheme that has proved successful in Germany, mini-jobs would allow people to take on small amounts of work without paying tax or national insurance contributions. Under the German flexible contract system, workers can earn up to €400 a month tax-free while their employers pay a flat rate fee to cover the costs of pension contributions, social insurance and wage taxes.

Mini-jobs have been heralded as a major force behind Germany’s low unemployment rates, but critics say they help institutionalise the low-paid and temporary work sector, fuelling wage inequality. A Conservative MP, an ally of Chancellor George Osborne, told the Financial Times that the idea was being given serious consideration by the Government. However the Department for Business, Innovation and Skills, headed by Liberal Democrat Vince Cable, said in a statement:

“This proposal is a German solution designed to deal with particular issues in the German labour market, driven by their relatively high taxes on labour. This is quite different to the situation in the UK.”

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk