Importance of Legal Status
Why does it matter whether a worker is self-employed rather than employed?
The legal status of an employee differs from that of a self-employed
person: a different level of statutory and common law protection is
afforded to employment compared to self-employment. In particular,
self-employed workers (not just employees) may be covered by equality
legislation. We have set out in the
Guidance Note: Employment, Self-employment, and IR35
, a list of rights of a worker if they have the status of employee.
If a worker is self-employed, the client need not operate Pay as You Earn
(PAYE). H M Revenue & Customs (HMRC) is therefore suspicious of any
artificial self-employment relationship.
A worker’s status in tax law may be different from the worker’s status in