TAX & NATIONAL INSURANCE IMPLICATIONS OF THE PIMLICO PLUMBER STATUS
The Supreme Court has upheld earlier decisions which confirmed that the individual was a “worker” and not self-employed.
This case deals with employment status and has been a long running battle between Gary Smith the Plumber and Pimlico Plumbers Ltd.
The “worker” status gives employment rights such as the minimum wage, holiday and sick pay. This is something which has very much come to the fore recently with workers such as Uber drivers.
The difference between a worker and an employee is significant for PAYE and national insurance purposes. The legislation specifically refers to employees and not “workers”. This means that as the current law stands, HMRC cannot chase businesses which uses the services of individuals under worker contracts.
A “worker” is like an employee in as much as they personally carry out the work and do not perform this task via an intermediary like a company. The same status tests of control apply, such as the right to send a substitute worker and the obligation of the employer to provide work to this individual.
The Pimlico decision has resulted in renewed calls for the government to step in with legislation to make employment status clearer. The 2017 Taylor Report recommended exactly this but the government did not follow through!
Just bear in mind that the best way to avoid an HMRC challenge over employment status is for your contracts and working practices to impose as little control as possible over the freelance people who work for you!
If you would like our help to understand the implications in more detail for your specific situation, call us today on 02392 449732 or click on the ‘Request Call Back’ button below and we will be happy to have a chat.
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This is Vicky, signing out for now and remember – Behind every good business is a GREAT Accountant!