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Employment Status - the Barometer

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Employment status is a key focus for many employers, with a number of Government inquiries underway and a flurry of recent case law. The employment status conundrum is nothing new, however its application in the so called ‘gig economy’ is unknown territory.

So why is employment status so significant?

Its importance is twofold, firstly it determines what employment rights are applicable and secondly it impacts on the tax regime applicable to the individual.

Employment rights

Our table below explains the employment rights applicable to employees, workers and the self-employed.

Employment status - what does it mean? Chart showing how employment status effects statutory rights

Tax

When looking at self-employment for tax purposes, similar, but slightly different, rules apply. There is no concept of a ‘worker’ for tax purposes; those who are ‘workers’ will usually (but not always) be accepted by the tax authorities as self-employed.

The following table sets out the tax implications of employment status.

Chart showing how employment status effects tax

keep up to date with the latest cases, reviews and commentary

Our latest blogs on employment status

DWF's employment status audit
We understand the benefits of a flexible workforce and that resourcing your staff appropriately is not an easy task. To overcome this challenge we can offer you the DWF employment status audit. To find out more download our DWF employment status audit information sheet.
   

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