Recent reports published by Citizens Advice, show having a strong understanding of your employees employment working status is vital, though there are continued challenges surrounding this topic.
With the contractor market, continuing to increase, the Government have begun to action some positive steps in evolving the system of self-employment, with plans to scrap Class 2 NI and moving Tax returns on to an online system. Though there are still strong questions surrounding self-employment status.
With a lack of certainty, around the definition of self-employment, some workers are told that they are self employed, though the Government would see them as employees.
It is vital that businesses process their contractors in the correct manor to ensure that the right payments are made to HM Revenue & Customs, ensuring that the worker receives their basic entitlements such as National Minimum wage, Pension contributions and holiday pay.
Through a survey carried by Citizens Advice surveying nearly 500 clients, it is thought that one in ten people are bogus self-employed, leaving the worker loosing on average £1,288 a year in holiday pay and contributing an additional £61 per year in National Insurance, that they would not be required to pay if they were classed as employed.
The frustration within the industry means that complaint and responsible businesses, that legitimately employee their workers, are at a disadvantage.
CIPP reports on the findings of Citizens Advice and their recommendations for the future.