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Employment Status

Employment status is not simply a legal concept; it is also one of the most influential aspects of an employee’s working experience. Employment status impacts a person’s salary, rights on the job, and compensation structure. The employment status in UK law depends on the terms of a person’s contract of employment, rather than their work.

Someone who works for a company is most likely an employee if the majority of the following is true:

  • They must regularly work unless they are on leave, such as on vacation, sick, or maternity leave.
  • They must work a certain amount of hours and expect to be compensated for their labour.
  • A manager or supervisor is in charge, dictating when and how a piece of work should be completed.
  • They are unable to delegate their responsibilities.
  • They receive paid time off.
  • They are entitled to contractual or statutory sick pay and maternity or paternity leave.
  • They may participate in the company’s pension plan.
  • They are subject to the company’s disciplinary and grievance processes.
  • They work on the company’s premises or at a company-provided place.
  • Their agreement specifies redundancy methods.
  • The company provides the supplies, tools, and equipment for their task.
  • They solely work for the company, or if they have another employment, it is unrelated to their work for the company.
  • Their contract, terms and conditions, or offer letter (sometimes known as an ’employment contract’) contains terminology such as ’employer’ and ’employee.’

Being employed and self-employed are different. Self-employed means you work for yourself and are responsible for operating your own business. On your profits, you’ll pay tax and NICs. Some organizations abuse job seekers by classifying them as self-employed when they should be employees. False self-employment is the term used to describe this approach. This means that the company avoids using Pay As You Earn (PAYE) and hence does not pay tax or National Insurance on your wages to HM Revenue & Customs (HMRC). HMRC might seek PAYE payments that should have been paid by the business from you if they feel you should have been treated as an employee but weren’t. However, they should contact the business first.

We are open for business and happy to accept your call. Our team of qualified accountants and tax consultants have broad skills and experience across all areas of accounting, taxation, tax planning, savings, and business investment which they utilise to the best of their abilities to help your company and achieve the best possible outcome for you. If you want to meet with us, we have a team of qualified personal tax accountants who can meet over the phone, via video call, or in one of our offices.

Perhaps it’s time to look for a new accountant if you haven’t enjoyed such kind of assistance from your existing one? Our accountants will work with you or your business to ensure that all elements of your finances are handled proactively so that you can refocus on what matters most – operating your business!