Uber Decision Highlights the Three Borders between Employment and Self-Employment

by ukcivilservant

It’s fiendishly complex!

Most of us are clearly either employed or self-employed – or both at the same time if we have a regular job and a separate business. But what happens to the self-employed if they begin to work wholly for one company?

First, they might become ‘a worker’ in which case certain EU-based rights kick in, including to the minimum wage, rest periods and holidays. This was what the Uber case was all about, and it is hard to read the judgement without sharing the judges’ sympathy for the drivers’ case.

But the Uber drivers have not crossed the separate boundary into ’employment’ for the purposes of UK employment law.  So they are not entitled to redundancy payments, nor are they protected against unfair dismissal.

It is less clear whether they have crossed the (third and conceptually separate) boundary into being employed for tax purposes, so that PAYE tax and NICs have to be deducted.  I suspect not – and yet how will the minimum wage regulations not be enforced if not by HMRC?

The tidy minded amongst us would no doubt like all these three boundaries to coincide.  But that would mean many workers losing rights – or alternatively many others getting caught up in PAYE – which would be very welcome to the Chancellor.

[For the avoidance of confusion, it is also possible to receive miscellaneous income, such as one-off fees and royalties, without being self-employed or an employee.  HMRC usually collect tax on such income after the end of the tax year.]

As ever, corrections and comments are welcome, either below or to by email .

Martin Stanley

Websites:  Understanding Regulation  &  UK Civil Service

Twitter  @ukregulation  and  @ukcivilservant

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