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Markel Tax

14 Jun 2018

Pimlico decision underpins Markel Tax review policy

The long-awaited Supreme Court decision of Pimlico Plumbers has been released and found in favour of the individual in confirming his status as a ‘worker’.

This highly publicised case is subject to much commentary with many seeing this decision as a landmark case which will pave the way for radical reform.

The facts of this case have been widely covered and centred around Mr Gary Smith who was engaged by Pimlico Plumbers under contracts which the company asserted demonstrated a self-employed relationship.

The Supreme Court upheld the Court of Appeal’s decision and confirmed that the contracts and working relationship demonstrated that Mr Smith was under an inherent obligation to provide the services personally and that the company retained a significant framework of control over the manner in which Mr Smith performed the services.

No bearing on tax status

Pimlico Plumbers’ appeal was hindered significantly by the written contracts it had in place with Mr Smith; the courts consistently highlighted the issues around wording of the contracts, the lack of express written confirmation in respect of substitution and control and the style of language used in the contract itself.

The written contracts did not establish the self-employed relationship desired. However, it is important to remember that this decision granted Mr Smith ‘worker’ status which did afford him some protections such as right to holiday pay and protections against discrimination. It did not grant him full employment rights and, under the current law, it has no bearing on tax status.

This position may change next year due to the various consultations and legislative changes currently being considered by government.

Properly drafted contract essential

David Harmer, tax consultancy manager at Markel Tax said: “In our opinion, this judgement should not be seen as the ‘end of the gig economy’. The facts of this case are vastly different to other high profile cases regarding drivers and they do not automatically set a precedent by which these other cases must be judged.

“This case does, however, highlight the fundamental importance of having a properly drafted contract which provides clear and express rights and intentions.

“We have been strongly advocating this message at Markel Tax for years, which is why we always thoroughly review contracts and working practices to ensure our clients have a robust written contract they can rely upon.”

Tagged worker status
Next article in series

24 May 2018

Tax advice: Employer-provided vans and deemed domicile rules

Every year, our tax and VAT helplines receive over 55,000 calls. Each month, we provide a round-up of topical news and below is a short summary of the key points our team has been discussing with accountants in May.

Strategic partners

  • Tolleys
  • Institute of Financial Accountants
  • BTC Software
  • AccountingCPD.net
  • Lovell Consulting