Uber (2)
On Friday Uber drivers won the right to be classed as workers, gaining new rights unavailable to the self-employed.
Following the ruling by an employment tribunal in London, Uber drivers are now entitled to the National Minimum Wage, holiday rights and paid rest breaks - all rights out of reach for gig economy workers.

In light of this verdict, HMRC could go after businesses that depend on a self-employed workforce and those failing to comply may be faced with interest and penalties of up to 100% of the outstanding tax liabilities, say chartered accountants Blick Rothenberg LLP.

Gary Gardner, tax dispute specialist partner at Blick Rothenberg, said that the tribunal ruling will "directly impact the 30,000 self-employed drivers and may also affect the employment status of the tens of thousands working under similar conditions."

“This landmark ruling has very much put the gig economy into the spotlight and strengthened HMRC’s hand in terms of challenging the employment status of those currently considered to be self-employed.”

He advises: “Businesses that depend on a self-employed workforce should review their arrangements to ensure they can withstand scrutiny from HMRC. Incorrect classification can result in the employer or contractor being held accountable for any tax and/or NIC not deducted. This could include interest and penalties of up to 100% of the outstanding liabilities.”

Today’s decision has arrived hot on the heels of the announcement made last week by Jane Ellison, financial secretary to the Treasury, that HMRC has launched a specialist unit to investigate companies who opt out of giving workers employment protections by using agency workers or calling them self-employed.

Ellison’s announcement followed pressure from Frank Field MP about his concerns with the employment status of delivery drivers and other operators in the so called ‘gig economy’. The ‘gig economy’ is characterised by short-term temporary contracts with workers who are classed as self-employed and have none of the rights and protections of employment such as, minimum/living wage, sick pay, holidays and pensions.

Gardner continues: “Employment status for tax purposes is not determined on the terms of any written contract alone but on a full consideration of the actual arrangements and working relationships in place and by applying the so called ‘status tests’ to establish the reality of the arrangements in place.”
Friday's ruling conflicts with recent research that claims that Britain's self-employed don't want any rights at all, with 80% of freelancers stating that they're happy with being part of the 'gig economy'.
Uber will be appealing this outcome as they stand by their argument that their drivers are self-employed contractors. Uber have faced similar claims in the USA in the past, and it is likely that this ruling "could have a significant impact on the business models of companies like Uber, Deliveroo and other apps which match service providers to customers." according to Kathryn Dooks, employment partner at Kemp Little LLP. She continues, "In the meantime, Uber can expect a large number of claims from its drivers following this test case and other apps can expect similar claims."