Workers' rights in what is commonly termed the "gig economy" have been under scrutiny recently, with the tribunal considering the employment rights of drivers in the Uber case in October 2016 and City Sprint in November 2016, and Unions taking action for recognition for Deliveroo riders.
The term “gig economy” is used to describe the trend towards workers taking work on a “gig” basis, engaging with businesses on flexible, generally short-term assignments, in contrast to a traditional employment model. The focus of the cases relate to rights enjoyed by "workers", an employment category which falls somewhere in between the "employee" and the "self-employed", with the main rights being in relation to the National Minimum Wage and working time and holiday pay under the Working Time Regulations.
So far the cases have not considered the tax implications of such working. The Office of Tax Simplification has published a paper focussing on the tax issues raised by gig economy working. The paper does not contain recommendations nor does it seek a response to any question, although it states that comments are welcomed. The paper states: "we are seeking to promote discussion on the issues and to ensure that tax aspects are not forgotten about in the understandable focus on employment rights and related matters."
While there are 3 types of employment status for employment rights purposes: employee, worker and self-employed, there are only 2 for tax purposes: employee and self-employed. This can cause confusion. The OTS comments on the significant growth in self-employment and that perhaps the "most important driver" has been the emergence of the flexible or "on demand" workforce.
For those who are following the discussions on gig economy working, the OTS report may be accessed on this link: https://www.gov.uk/government/publications/the-gig-economy-an-ots-focus-paper
The employment status of gig workers has implications on the tax system as status for tax and employment rights are not always the same. The OTS questions how gig workers interact with the tax system and whether the system is simple for them.