Faculty of Economic and Management Sciences
School of Financial Sciences
Department of Taxation
Selected Highlights from Research Findings
The concept of an Independent Contractor in South Africa
Business in the modern free trade world economy is extremely competitive and complicated; partially due to the amount of complex and often contradictory legislation that one has to contend with when conducting business.
In recent times, there has been a decisive shift towards outsourcing as companies are increasingly concentrating on their core business. It is important that businesses utilising the skills of non-permanent service providers, commonly known as independent contractors, as well as the individuals acting in the capacity of independent contractors, fully understand the relevant legislation, often contradictory, that governs this industry.
This study attempted to highlight these contradictions as well as the risks and obligations relevant to the contracting industry with specific reference to the Income Tax and Labour Relations Act. This study additionally provides some insight into the legislation currently in force in the United Kingdom in order to determine whether something can be learnt from the United Kingdom that may be useful in a South African context.
The examination of the United Kingdom scenario highlighted some of the processes and procedures currently in use to determine the employment status of a service provider in the United Kingdom. These processes and procedures are, however, very similar to those in place in South Africa. This study, therefore, indicates that the United Kingdom struggles with mostly the same issues as South Africa.
The South African and the United Kingdom Revenue Service may, therefore, find it very helpful to work closely together to address the relevant issues plaguing the contracting industry. Sharing their respective knowledge and experience will certainly benefit the industry and help to solve some of the current contradictions.
Prof R Oberholzer
Taxation
+27 (0) 12 420 4590
ruanda.oberholzer@up.ac.za
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