Employment status

The question of an individual’s work status is far from straightforward. The matter is decided by considering the nature of the engagement between the individual and the party who engages them.

It is not sufficient for the contracting parties to describe the relationship in their own terms; rather, the authorities (HMRC and the courts) will look at the reality of the situation and ‘test’ the relationship considering all the relevant factors.

The onus is on the party who engages the individual to determine the work status. Issues to do with tax and national insurance contributions flow from this as do the rights of the individual, and the obligations of the party engaging them.

The law refers to the below types of worker:

Employment status areas

Agency workers

These are individuals who enter into a contract with an ‘agency’ to undertake work for the agency’s client. The worker provides services to the agency’s client and works under the control of the client. It is very unlikely that the law will find that the individual is either an employee of the agent, because no […]

Employees

Employees comprise the largest group of individuals working in the UK. They work under an employment contract, which is also called a contract of service. Both employer and employee will have terms implied into the employment contract. Employees have wider responsibilities towards their employer. They enjoy a broad range of employment protection rights, for instance […]

Office holders

An office is a permanent position which exists independently of the person who fills it. It exists as part of a wider constitution of rights and responsibilities and many offices have some degree of public relevance. An example of a public office holder is a police constable. Company directors are office holders because their powers […]

Partners

A partnership (or firm) consists of two or more partners. An agreement is inferred at law, however in practice many partnerships have a written partnership agreement detailing the relationship. All partners are entitled to share in the capital and profits of the partnership and to contribute towards any losses equally, unless otherwise agreed. Other types […]

Self-employed

Where an individual works for themselves they will derive little protection from employment legislation. They operate in business for themselves, trading with a number of clients. A self-employed person in business has control over the delivery of their goods and services, with the opportunity to profit from their activities. They have to bear the financial […]

Workers

Workers comprise the widest group and they include employees. They perform the work personally and are not able to send substitute workers in their place. A worker’s rights are less extensive as compared to an employee’s rights. Some of the rights of a worker include National Minimum Wage, statutory paid holiday, 48 hour working week, […]