Online platforms could operate a system equivalent to PAYE, deducting tax from earnings and taking responsibility for fulfilling the tax obligations of their workers, according to the Office of Tax Simplification (OTS).

In its third paper on employment status, the OTS says the switch could be optional and would not change the status of any worker. It is urging the government to consider the proposals.

However, Paul Morton, OTS tax director, said: ‘For those who chose it, it would remove the administrative burden from these individuals and mean …