Despite today's Supreme Court ruling for the gig economy the plumber, Mr Smith, is still self-employed for tax purposes and therefore still responsible for his own tax affairs says Blick Rothenberg.
Gary Gardner, a partner in Blick Rothenberg's tax risk and dispute resolution team said, 'This Supreme Court decision will potentially impact thousands of workers in the gig economy. It will also set a significant precedent for on-going legal battles with other gig economy firms, such as UBER and Deliveroo who are in dispute with their workforce over their employment status.'
He added, 'Worker status provides entitlement to employment protections such as sick pay, minimum wage, holiday pay and protection against discrimination but does not change the employment status for tax purposes. Those who find themselves awarded worker status should be aware that they will have won the right to employment rights and protections but will remain self-employed for tax purposes and should keep their tax affairs up to date with HM Revenue & Customs ("HMRC").'
Gary said, 'Although the concept of worker status has been around for some time it does highlight the confusion caused by the fact that we have three categories of employment status: employed, self-employer and worker. The first two categories are relevant for employment law and for tax purposes whilst worker status is only relevant for employment law purposes.'
He added, 'This is not to underestimate the importance of this decision as the rights Mr Smith won are basic rights that employees take for granted. There is also the cost to Pimlico Plumbers of having to meet the costs of sick pay, maternity and paternity pay and holiday pay.'
He said, 'It remains to be seen whether HMRC decide to mount a challenge against Pimlico and other businesses in the gig economy firms to argue that these workers are in fact employed.
Gary added, 'The government needs to consider the confusion and complexity inherent in the current labour market, particularly when considering extending the off-payroll working rules imposed on the public sector last year into the private sector in 2019.'
For more information, please contact Gary Gardner