Subcontractors or Employees?

December 4, 2018

With the media storm surrounding Plimlico Plumbers earlier this year, it has no doubt left you confused as to the status of your self-employed contractors – or are they now workers? Or worse: employees? Toni Robinson helps us clear up the confusion. 


For me, the surprise of this case is that it got all the way to the highest court in the land, without determining that the claimant was a worker before this challenge. After all, he worked solely for the respondent for six years, wore their uniform, leased a van with a GPS tracker and, following a heart attack, requested to reduce his working days from five to three. The respondent denied his request.


The flip side, which will no doubt now need to be addressed by a HMRC Tribunal is that whilst the claimant was VAT registered, both he and the respondent benefited from paying significantly less tax and National Insurance as a result of their arrangement.


There are several tests applied when assessing the status of a contractor or worker. The tests applied when assessing the status of the services provided have been in force for many years and include (but not limited to):


The Right of Substitution – where the contractor can subcontract the work to an alternative contractor of equal competence without company objection


No Mutuality of Obligation – neither party is obliged to offer or accept any work


Control – there should be limited (if any) control on the provision of the services by the contractor


The media will have you believe that this is a “shake up” of the “gig economy”, whereas in my view, it’s a correction of the previous courts mistakes.


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