Whether someone is employed or self-employed is an area that’s always been a bit ‘fluffy’ to say the least for both employers and the self-employed.

The recent ruling in the Supreme Court, saw the Pimlico Plumbers appeal rejected in a landmark case.  The UK’s highest court upheld the Court of Appeal’s decision after a further appeal from Pimlico Plumbers who claimed a worker, who worked at the company for six years, was self-employed not employed.

The Supreme Court ruled that a plumber classed as self-employed was, in fact, a worker, even though he had paid self-employed tax and was VAT registered.  This means as a worker, he was entitled to the national minimum wage, holiday pay and protection from discrimination.

So how can you tell what makes a person employed or self-employed, well, on the whole, the principle 'they look like an employee and smell like an employee so treat them as an employee' is generally the right way forward.  In other words, if you wear the uniform, drive a branded vehicle and only work for one company, you are more employed.  There are obvious advantages to both ways of working, but in order to protect yourself as an employer, worker or self-employed than when it comes to employment status, make sure a contract makes it crystal clear and all involved are treated accordingly.

It’s an area of employment law that needs to be tidied up, with the government laying out clearer lines between what constitutes being an employee or self-employed.  The recent cases have certainly emphasised the importance but how long this will take is anyone’s guess.

So we’ve had a look at the www.gov.uk website to see what the government currently say about what makes a person employed or self-employed:

"Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

  • they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
  • they can decide what work they do and when, where or how to do it
  • they can hire someone else to do the work
  • they’re responsible for fixing any unsatisfactory work in their own time
  • their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
  • they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
  • they can work for more than one client

Someone can be both employed and self-employed at the same time, for example if they work for an employer during the day and run their own business in the evenings."

Good communication is always sensible and ensures there’s clarity between employers and workers of any variety to ensure all parties understand and are happy with working arrangements.  Although if you have doubts or questions and to avoid possible fines if HMRC decides to reclassify sub-contractors as employees, it always best to get advice.