The national audit office Algemene Rekenkamer has criticised the tax department for failing to take action against pseudo self-employment, saying few companies and freelancers face checks.

The audit office, which analysed 1.1 million freelancer tax returns, said in its report that the chance of catching people who act as freelancers but should be considered regular workers is low.

This is partly down to a moratorium on active checks as well as a shortage of qualified staff, the audit office said.

The self-employed pay less tax and premiums than people in regular employment while the companies which use them do not have to pay premiums on pension contributions on their behalf. This, the audit office said, is distorting the labour market.

The problems stem from legislation introduced in 2016 which replaced the VAR freelance declaration and was supposed to tackle pseudo-self employment by making client and freelancer jointly responsible.

However, the law was so criticised it has never been formally enforced and tax inspectors are still limited to making checks in specific cases only.

In the two years to the end of last year, tax officials visited just 475 companies to check up on their use of freelancers, but identified just four potential infringements, the audit office said.

Questionnaire

Enforcement efforts currently focus on an online questionnaire in which client and contractor can check whether their working relationship is an assignment or an employment contract, but this too is rarely used has been criticised for failing to provide clarity.

Tax minister Marnix van Rij said in a reaction that he ‘recognises the problems’ and will take them seriously. The audit office report will also form part of government plans to reform the Dutch labour market, he said.

Unions have resorted to the legal action to tackle pseudo self-employment at so-called platform companies like Uber and Deliveroo, and in several instances, the courts have ruled drivers and delivery riders should be considered regular employees.