Are there any differences in employment status for employment law or for tax purposes?
The key factors for determining status for employment and tax purposes are generally the same. However there are some cases that highlight the different approaches taken by employment tribunals and HMRC when determining status. The important thing to consider for IR35 purposes is that being deemed employed for tax purposes does not mean a contractor is ’employed’. PSC’s can still be used in moving forward but there are likely to be discussions on the commercial aspects of the contractor arrangement. Employment status for tax purposes is likely to come at a cost for both parties.
Related FAQs
The guidance states that people should aim to wear a face-covering in indoor spaces where social distancing is not always possible and they come into contact with others, for example on public transport or in some shops, and potentially in the workplace. Face coverings do not mean face masks such as clinical masks worn by certain key workers as PPE, which should be reserved for those people.
Staff working in areas that are open to the public must wear face coverings, this includes:
- shops
- supermarkets
- bars
- pubs
- restaurants
- cafes
- banks
- estate agents
- post offices
- public areas of hotels and hostels
If these businesses have taken steps in line with Health and Safety Executive guidance for COVID-19 secure workplaces to create a physical barrier between workers and members of the public then staff behind the barrier will not be required to wear a face covering.
For other indoor settings, employers should assess the use of face coverings on a case by case basis depending on the workplace environment, other appropriate mitigations they have put in place, and whether reasonable exemptions apply.
In part in response to the Covid-19 pandemic, legislation was passed by the government earlier this year which sought to assist companies to trade through the current economic climate. Included within the measures is a degree of protection from compulsory winding up.
The Corporate Insolvency and Governance Act 2020 (The Act), was laid before parliament on 20 May, and became law on 26 June. It is important creditors are aware of what changes have been implemented and the potential and impact which it may have upon debt recovery action you may be considering or have already commenced.
The main part of the Act affecting creditors is the temporary restriction on presentation of winding up petitions and the factors that the Court has to take into account when deciding whether to wind up a company.
On Thursday 24 September 2020 the government passed a further statutory instrument which extended the operation of these restrictions. As a result, the measures which were due to expire on Wednesday 30 September 2020 have now been extended until 31 December 2020.
A key point to note is that the Act has retrospective effect so any pending petitions presented after 27 April will be affected, along with any winding up orders made after that date.
The Act has introduced the following restrictions:
- A petition cannot be presented by a creditor during the period of 27 April 2020 and 31 December 2020 unless the creditor has reasonable grounds to believe that (a) coronavirus has not had a financial effect on the debtor, or (b) the debtor would have been unable to pay its debts even if coronavirus had not had a financial effect on the debtor;
- A petition cannot be presented after 27 April 2020 if it is based on a unsatisfied statutory demand served between 1 March 2020 until 31 December 2020;
- When deciding whether to make a winding up order the Court will need to be satisfied that the grounds giving rise to the petition would have arisen even if Covid-19 did not have a financial effect on the debtor;
- All winding up orders made between the 27 April and 31 December will automatically be void (that is, of no legal effect) unless the Court would have made the winding up order if the new law was in force at the time the order was made.
Although these measures fall short of the level of assurance given to employees both in terms of eligibility for an immediacy of access to payments, they are a vast improvement on the support for self-employed workers that has been put in place until now. Current support includes:
- Access to business interruption loans
- Self-assessment tax payments that were due in July 2020 have been deferred until January 2021
- VAT is deferred until the next quarter
- The introduction of Time to Pay arrangements under which deferrals for HMRC payments can be agreed
- The minimum income floor for universal credit has been suspended which will allow self-employed workers to access the equivalent of Statutory Sick Pay (SSP)
- Universal credit and tax credit payments to increase by £1000 per year
As above, people must not leave their home unless they have a ‘reasonable excuse’ and travelling should be limited to their local area. Employees may leave their home and local area to travel for work if they cannot reasonably work from home. You should attempt to reduce the number of journeys they make.
The Office of the Public Guardian is continuing to accept applications to register Lasting Powers of Attorney but their usual estimated timescale of eight to ten weeks is likely to be affected by the current situation.
Consequently, an alternative or interim measure if you need something quickly is to execute a General Power of Attorney to authorise someone to act as your Attorney to undertake day to day financial transactions for you. The General Power of Appointment only needs to be executed by you in the presence of a witness (not the Attorney) to be valid and does not need to be registered with the Court of Protection. However, the Power of Attorney would cease to have effect if you become incapable of managing your affairs. It should be seen as a stop-gap only.