Tax system stifles flexible working

The government needs to rethink how tax regulations influence work patterns, says Ernst & Young. The current system is stifling the move to flexible working, and significant change is needed.

Sarah Hyde, head of E&Y's Employer Solutions Practice, says that the UK's inflexible tax system is an impediment to evolving work practices. "Those most affected are working parents, especially mothers," she adds. "The tax and legislative infrastructure operates against flexibility because it makes ingrained and outmoded assumptions about how work is done and where."

Ernst & Young offers a series of suggestions for a regime more in tune with current employer and employee needs, including:

• working cost tax relief for all employees
• childcare expenses treated as tax deductible
• radical tax incentives to encourage telecommuting
• major extension of the tax deduction for workplace nurseries
• reduction in NIC to reward employers who demonstrate a commitment to flexibility.

E&Y says such moves are essential if the government is to foster the flexibility demanded by a rapidly changing economy.

Elliott Chase