In another landmark case for those working in the so called ‘Gig Economy’, the Supreme Court has ruled in favour of a plumbing and heating engineer being a worker as opposed to being self-employed; granting him access to workers rights including sick pay, holiday pay and protection for unfair dismissal. You can read the full story here.
This is not the first case of its kind, with other gig economy employers including Uber and Deliveroo having cases brought against them in relation to the employment status and rights of the people working for them.
Find out more about the gig economy and the rights of those working in it in our latest blog post.
What Is The Gig Economy?
A gig economy is an environment in which temporary positions are common and businesses contract with independent workers for short-term engagements. There are around 1.3 million people in the U.K. working in the gig economy.
Roles available often include couriers, taxi drivers and food couriers; it’s important to note that whilst these people may be classed as ‘self-employed’ they do not own and generally have no influence over the business they are working in.
What Rights Do Gig Economy Workers Have?
In the gig economy, employers argue that the people that work for them are independent self-employed workers, thus entitled to no employment rights; this is one of the biggest criticisms of the gig economy.
In comparison to a regular employee, people working in the gig economy have typically missed out on the following entitlements:
- Being paid the minimum wage.
- Being automatically enrolled into a Government pension scheme.
- Being paid holiday, sick, maternity, paternity or adoption pay.
- Being entitled to whistleblower protection.
- Being entitled to protection from unfair dismissal and redundancy.
- Being protected from unlawful discrimination and deduction of wages.
You can find out more about rights of gig economy workers in comparison to employees and the self-employed in our handy infographic here.
What Does This Ruling Mean For Employers?
It is hard for employers to know exactly what to take from these rulings as there are always unique individual circumstances to consider. It does however reinforce the message that in these cases, the employee is generally favoured should anything be taken to court.
As the gig economy is a fairly new concept, there is no real legislation for employers to rely on. This can make it difficult when setting up or running a business that relies on this kind of work.
However, this could be set to change. In November 2017 the Government released a draft bill proposing that all workers in the gig economy were granted the status of ‘worker’, giving them access to basic rights such as sick and holiday pay.
Tax Obligations for People Working in the Gig Economy
If you are working in the gig economy, it’s important to remember that you are probably classed as self-employed, meaning you have a number of tax obligations to fulfil. To avoid any fines from HMRC, you should ensure you do the following:
- Register as self-employed with
- Keep accurate accounting records.
- Calculate any additional expenses.
- Submit your annual self-assessment tax return.
Talk To the Experts
If you’re currently working in the gig economy, it’s important to remember that, dependent on the arrangement with your employer, you will still have a number of tax obligations to fulfil.
At First Call Financials, we work with businesses and individuals across many different sectors and business models to simplify their tax and accounting requirements. For more information, give one of our expert team of accountants and tax specialists a call today on 0117 379 0810
- 5 Things to Think About from a Financial Perspective When Starting up a New Business - July 28, 2021
- Income Tax in Wales Is Changing – What You Need to Know - September 24, 2018
- Landmark Gig Economy Case – Pimlico Plumbers - August 29, 2018
This post was written by Tarah