Uber drivers are workers but where does that leave the statutory employment status test now?

The Supreme Court has today decided that Uber drivers are workers, ending a multiyear court case and confirming that Uber drivers are entitled to worker’s rights including holiday pay and national minimum wage.

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The decision will impact the business models of many in the gig economy, but it has not settled the ongoing debate on how employment status is assessed or whether tax and legal employment status will be aligned. 

Carolyn Brown, Employment Legal partner at RSM, said: ‘The pandemic has brought the issue of employment status into sharp focus with the Job Retention Scheme supporting a broad church of those paid on payroll, including not just employees but workers as well. This didn’t include the self-employed (who needed to claim under the SEIS) or directors of their own personal service companies. 

‘Meanwhile, Matthew Taylor’s Good Work Plan recommendations were expected to be included in the, still missing, Employment Bill promised last year. Mr Taylor says he feels the Government’s reform agenda has slipped. However, Government ministers are continuing to say that they take this issue seriously and the Employment Bill is expected this year.’  

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Susan Ball, Employment Tax partner at RSM added: ‘Like the NHS and social care, is the end of the furlough scheme and SEIS in the current climate a chance to build back a better system going forward and finally give businesses certainty on applying correctly employment tax and legal status ?’

‘Many will be looking to the forthcoming Budget to deliver an announcement on a statutory test of employment status. The Government has already trailed that it will publish a range of tax consultations on 23 March; and this would be an ideal opportunity to consult on the alignment of a tax statutory test and a legal test for a potential start date of April 2022. All eyes will be on the Chancellor on 3 March to help settle the ongoing debate.’ 

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