Self-employment status and rights

In 2018, the government published its ‘Good Work Plan’ in response to the independent Taylor Review of the UK’s employment framework. In response to the various recommendations made by the review, the government launched four separate consultations on how to make employment law fairer for both employees and self-employed workers, one of which looked at increasing clarity around employment status for both employers and workers.

The clarity of employment status has received a great deal of attention in recent years due to so-called ‘IR35’ tax reforms, which aim to address a legal loophole whereby contractors who are employees in all but name pay less tax than PAYE employees. These reforms have already come into force in the public sector, but have been delayed until April 2021 for the private sector due to the impact of COVID-19.

The rise of new business models and ways of working have raised concerns that some workers are not receiving the rights and benefits to which they should be entitled, while others are not paying the right taxes. As a result, the government will introduce legislation to improve the clarity and transparency of employment tests. Detailed proposals to be drawn up to better define and test employment status (including the definition of self-employment) and to align this more closely with worker rights and tax obligations.

Immediately upon appointment, employers will also be duty-bound to provide workers with a written statement of their contractual terms, including details such as any benefits or paid leave to which they may be entitled. Agency workers are to be provided with a ‘key facts’ document outlining details such as pay and fees.

In these changing times, employers are strongly advised to seek expert legal advice if they are uncertain about any aspect of employment status or their duties under existing and forthcoming legislation. We can advise you on the difference between self-employment and employment status, and the rights to which each group is entitled, giving you peace of mind that you’re on the right side of the law.

Service and consultancy agreements

When you hire an independent contractor, it is very important to set out the terms and conditions of their contract with a service or consultancy agreement. These differ from a contract of employment, which is used to hire employees, whereas a service agreement is usually set in place for a specific project or time period.

With forthcoming legislation placing more emphasis on written contracts and other documents for self-employed and agency workers, it’s more important than ever to get these kinds of agreements right. At Attwaters, we can advise on and draft service and consultancy agreements, ensuring they contain all the correct terms and don’t leave you open to litigation.

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