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The Sharing Economy | Employed or Self-Employed?
Forward Thinking Business Blog –
Casual work has always existed but new patterns of work in recent years are challenging traditional views of employment and self-employment. There are many examples of this with digital platforms often providing the means to connect service providers with potential customers. But employment status is not just an issue in the digital economy. It is also be a grey area in more traditional businesses like construction and agriculture. This matters because employment status affects tax, social benefit entitlements and employment rights.
In May 2018, HMRC published a consultation paper asking for comments on how best to address the compliance challenges with the off-payroll working rules in the private sector. Government has said that it wants to take account of the needs of businesses and individuals who would implement any change and is keen to hear from those who would be affected. The closing date for comments is 10 August 2018.
Meanwhile, in the Republic of Ireland, the Department of Finance and the Department of Employment and Social Protection published a report in January 2018 on the implications for social insurance and tax revenues of the use of intermediary-type structures and self-employment arrangements. More recently, a public awareness campaign on false self-employment has been running amid concerns about the rise in workers deprived of entitlements by being forced to work as self-employed.
The rise of the so-called ‘sharing economy’ has highlighted some employment status grey areas, explains Michael Farrell.
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Determining employment status
In the UK, the main types of employment status are: worker, employee, self-employed, contractor, director and office holder. Different rules and entitlements apply to each category. For employers and employees, it is very important to understand these rules and conditions as mistakes can prove very expensive.
In the Republic of Ireland, the Revenue Code of Practice for Determining Employment or Self-Employment Status of Individuals is a good starting point for understanding the differences between being employed and self-employed. This Code is available on the Revenue website.
Often, it will be clear when checking the rules whether an individual is employed or self-employed. However, it is always not easy — particularly where the individuals concerned work on a casual basis or in non-traditional areas of the economy.
If you need more information or are in any doubt about the employment status of individuals providing services to your business…
