The all new Tax Chat - Self Employed Workers?

Self employed workers?

Do you engage any workers on a self employed basis, if you do it is important that you bear in mind the recent Weight Watchers tax case.

Weight Watchers leaders have been engaged on a self employed basis for many years under a contract for services.  After scrutinising the contract HMRC has concluded that the leaders are in fact employees resulting in a liability to tax and NI.

The decision was based not just on the written contract but with particular regard to what actually happens in practice.  As a result it is a good idea to review the status of your self employed workers to ensure that the contract reflects the reality of the working relationship.

This case follows closely on the heels of another similar employment law case, Autoclenz Ltd.  This case started in the employment tribunal in 2007 and eventually found its way to the Supreme Court.  The question was whether or not 20 individual car valeters were employees for the purpose of the national minimum wage.

The contracts indicated that the company had no obligation to offer work and the valeters had no obligation to accept work if offered.  However as with Weight Watchers, the courts decided that the written contracts did not reflect the true agreement between the parties and that in reality the terms mean that the valeters were employees.

The recent case law indicates that this is currently a very hot topic with HMRC and an area where you really do need to be very careful.  Carrying out a review of any self employed workers that you engage to ensure that they are not carrying out an employment role is very important.  If a self employed worker is found to be an employee. Like Weight Watchers, you could be liable to pay a substantial amount of tax and national insurance contributions on their behalf.

For further information, please contact Lesley Sutton on 01484 550037 or taxchat@revellward.co.uk.