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An Uber decision

14th November 2016

At the end of October an Employment Tribunal ruled that drivers who are engaged by Uber are entitled to basic employment rights, including National Living or Minimum Wage, holiday pay and other benefits normally associated with being an employee.

The company who has maintained that the drivers are self-employed rather than employees will be appealing the Tribunal’s decision. Uber stance that via its app it helps to facilitate independent drivers connecting them with customers whereas the drivers claim they are under the control of Uber and therefore entitled to employment rights. Consequently, matters will be left unresolved until the middle of next year.

Th Uber decision coincides with a recent announcement from the Government that HM Revenue & Customs (“HMRC”) will be examining other organisations who engage individuals without operating PAYE. Off-payroll arrangements are not uncommon and over the years we have seen HMRC challenge arrangements involving intermediaries and agencies.

We have already seen changes to the tax and national legislation with regards to agency arrangements and further changes to the IR35 rules are due to apply from 6 April 2017. The proposed changes to the IR35 legislation will require an engager who is a public body, as defined by the Freedom of Information Act 2000, to operate PAYE and National Insurance on payments made to the personal service company. 

Whilst the Uber decision will have an impact for other organisations who engage a high number of individuals off-payroll, we may see an increase in the number of employment status enquiries being undertaken by HMRC. Maybe we will see further developments announced in the forthcoming Autumn Statement.

If you should have any questions regarding the Uber case or employment status generally, please speak with Nick Bustin, Director of Employment Taxes on 0207 969 5578 or via email nbustin@haysmacintyre.com or your usual haysmacintyre contact.

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