The Aftermath of the Uber Tribunal ruling
This is a follow on from my previous article ‘Should you be afraid of the Uber Tribunal?’ which you can read here. This article was featured in PHC and PHTM magazines.
One of the biggest misconceptions about the Uber Tribunal is that it ruled that ALL uber drivers are now regarded as self-employed. This is not the case.
Referring to my previous statement on this matter:
‘It is a First-tier tribunal which although legitimate and relevant, does not create precedent, it merely creates decisions that are considered persuasive in other judgements at the same level and above.’
To clarify, the implications of the tribunal are that there is now evidence of a successful argument for use in future tribunals. Contrary to popular understanding, there has not been a ruling that determines that Uber drivers are now employees and a precedent has not been set.
What you need to know…
1. As of the 13th December, Uber has filed an appeal to overturn the tribunal. Uber have declared that they will be appealing the tribunal decision. The outcome of the tribunal will be closely watched by those who are affected by self-employment status, although the truth is that there are probably greater implications for those that try to bypass the National Minimum Wage requirement. This was a major concern in the construction industry for many years but the baton has now been picked up with the emergence of the gig economy.
2. HMRC hasn’t officially given a comment on the Uber ruling, but it is likely that it will endorse the decision for practical and financial purposes. On the other hand, there are many inconsistencies that many Revenue inspectors would probably rather not be looked at too closely. Such as: HMRC literature states that where “a taxi driver provides his/her own taxi then they are likely to be self-employed”, Uber drivers provide their own cars. Most self employed drivers (including those that drive for Uber) have the option to accept or decline jobs. This would normally imply a lack of mutuality of obligation, a self-employed trait.
3. National Minimum Wage obligations require the driver to prove that they were defined as “workers” rather than self-employed subcontractors. The tribunal result could mean that HMRC may endeavour to recl assify other subcontractors both in the Private hire and the ‘gig economy’ under the definition of worker. This is easier than seeking to classify them as employed, but still brings in that much needed tax revenue.
4. Once again from an engaging parties perspective, strong contracts are a must, outlining in no uncertain terms the relationship with the subcontractor. There will also be other methods engagers may consider such as using incorporated or commercial contractors which would in effect ring fence the subcontractor’s company. There would be however be other potential legal consequences such as IR35 and Personal Service Company issues.
We will look at the options and consequences in our next white paper.
For more information on how changes in self-employment status could effect you, visit www.driverserv.co.uk.