Under UK employment law, there are three key types of employment status:
The tiers stated above along with the main two tax statuses (employed and self-employed) are crucial for employers and the people performing work for them, as rights and responsibilities need to be clearly outlined.
In response to the 2018 consultation the government confirmed how important employment statuses are, although they have hesitantly announced “The benefits of creating a new framework for employment status is currently outweighed by the risk associated with legislative reform” and therefore, no change to this sector has been introduced.
The government instead want to increase clear understanding and transparency on employment statuses, roles and responsibilities for individuals and employers by publishing further guidance.
The government also mentioned that the Check Employment Status for Tax (CEST) tool supports status determinations but there are borderline cases where the determination is more complex. The government has recognised that further uncertainty can be caused by the non-alignment of the status frameworks for tax and rights, which means that in some instances, an individual holds the status of self-employed for tax, but not for employment rights.
For further information regarding the consultation on employment status, please click on the link below: