Employment Status

Employment status is the status of an individual for the purposes of tax or employment law, i.e. whether they are employed or self-employed. For tax purposes it might just as well be called ‘tax status’, but it has become known as employment status. Employment status is established ultimately by case law but, on an everyday basis, it is up to the business or individual to figure out whether they are employed or self-employed.

The consequences of incorrect classification of employment status, however, can be very costly to a business.  If a business engages with self-employed sole traders and HMRC seeks to reclassify them as disguised employees, the tax bill can be huge, going back six years and could also include fines and penalties.

A self-employed individual could also make a claim for employment rights and seek re-classification as an employee.

Recruitment Law

All contracts, regulatory issues and general business advice for companies that work within the recruitment sector. The relevant legislation includes:

  • IR35 – Intermediaries Legislation
  • The Conduct of Employment Agencies and Employment Businesses Regulations 2003
  • Employment Intermediaries legislation (s.44 ITEPA 2003 – as amended)
  • Employment Intermediaries Reporting Requirments
  • Managed Service Company legislation
  • Agency Workers Regulations
  • Employment Rights Act 1996


Coaching Industry

The executive or business coaching industry has grown and there are companies that supply coaches who are self-employed or limited company to clients. Much of the legislation that affects the recruitment industry also affects the coaching company or any company that supplies consultants where a fee is taken.

Other Industries

There are many businesses that are probably completely unaware that they are acting as a so called ’employment business’ and that the legislation applies to them equally as it does to a traditional recruitment ‘agency’.  The recent HMRC Employment Intermediaries Reporting Requirements are a good example, where any business who supplies the services of a self-employed person or an individual who provides their services through a limited company, should be reporting certain details to HMRC.  If these reports are not made, penalties will be incurred.

Contact Rebecca:


Tel: +44 (0) 7967634415