After an interesting week with the media heavily reporting on employment status and self-employment within the UK, Nick Pilgrim, CIS Payroll Specialist and Managing Director of EEBS summarises the outcome of those two high profile cases, the budget and provides a helpful insight on what to expect next…

Deliveroo Win! Uber Lose! Parliamentary committee publishes plans for sweeping changes to Employment law! The Budget announces another Government review of employment status!

Well just another quiet week in the office then, because in light of just this week’s news alone, we all know how to deal with the issue of Employment Status, right?

No! I hear you cry!

Well, I am more than happy to run through the details of all the current ongoing and reported cases, and to discuss the implications of all of the above issues in detail if you’d like me to, but if you only want a quick summary of the current situation then read on…

In summary, the courts continue to give conflicting views about Employment Status, and in particular for the “Gig Economy”.  Government is still thrashing about trying to understand the whole issue of Employment Status in the 21t century, and to plan a way forward that helps both companies retain flexible well-paid workforces, whilst protecting the rights of individuals, and tax revenue.

In the Deliveroo case, the tribunal focused on the old favourite of substitution. In both the Pimlico Plumbers and Uber cases, the courts continue to focus on the accuracy of the contracts.  These results do, in fact, have an important degree of consistency about them, namely that decisions continue to be based upon the specific facts and details presented in each individual case. That’s a good thing, by the way.  The problem with that is where do you go for clear guidance on how to determine the Employment Status of your tradesmen?

Well I hate to be a tiny bit smug here (ok I lie – I am happy to be smug here) but we at EEBS have been saying for some time now that there are only two things to currently consider;

  1. There will inevitably be changes to how self-employment status is determined – it’s only a matter of when, not if.
  2. The most likely outcome of those changes are likely to raise the standard of test for direct engagement into line with the requirements that were established for intermediary businesses back in 2014. Simply put, supervision, direction or control in the manner in which services are provided will become the determining factor for Employment Status.

So you need to plan for the changes, whilst taking note of the current conflicting guidance from the courts. Or you could, of course, just outsource the supply of your sub-contractors to a company who have been doing it without HMRC challenge for 17 years, who use the country’s leading tax advisers to write their contracts, working practices and compliance procedures, and who provide bespoke solutions and ongoing support to each and every client. Or just do your own thing – you choose!