21.10.16 HMRC introduce new unit to tackle the exploitation of the “self-employed”
21 October 2016
21 October 2016
Jane Ellison, Financial Secretary to the Treasury, announced that HMRC were launching a specialist unit to investigate companies that avoid providing workers with statutory rights and protections by wrongly classifying them as self-employed, or by using agency workers.
This follows the news that HMRC has compliance teams investigating delivery company, Hermes, following claims from approximately 100 staff that state they were being paid below the National Minimum Wage (‘NMW’). To read our previous article on the Hermes investigation, click here.
Growing pressure also derives from Uber taxi drivers who await an employment tribunal verdict to confirm or deny that they should be classed as workers rather than self-employed and so, that they should benefit from the NMW, sick pay, holiday pay and pensions.
Reportedly, the new HMRC unit will be called the employment status and intermediaries team and they will focus on the so called “gig economy”. The unit will investigate companies that declare they use large numbers of self-employed workers and will also act on intelligence and/or complaints about alleged abuses of the rules around self-employment.
What does this mean?
It is clear that Government and HMRC are committed to work together to investigate the fast expanding “gig economy” therefore it is expected that over the upcoming months there will be a growing number of HMRC reviews of employment practices with a view to ensure that the self-employed are being protected.
If you engage self-employed workers it is crucial that they meet the criteria of being genuinely self-employed and you need to have evidence to support this. It is also crucial that your workers understand how they are being engaged to deter any challenge which could result in financial and reputational risk to your company.
If you are worried about your engagement of self-employed workers, feel free to give one of the Aspire team a call to discuss how we can help.