Springfords LLP blog

Some news, views and comments about everything and anything, relevant and irreverent.

Gig Economy Song and Dance

19 July 2017
Tax implications of the gig economy

Times They Are a Changin’ may no longer be in the charts, but the times really are changing for the way people work, rest and play. It’s time to start singing from the new employment song sheet especially where taxes are concerned.

You may have escaped being mowed down by a minicab or shunted by a delivery demon, but you can’t have missed the traffic jam of change that’s swept through the working practices of the British Isles. At Springfords we’re keeping in tune with the hits, and charting the changing sounds of employment status and taxation.

Careering down the pavement towards you, is a pedal-powering individual, intent on getting a piping hot pizza to a customer glued to their box-set. Someone who is very twenty-first century, but really has gotten on their bike to find work in the gig economy.

Turn the corner, and squeezing through your residential side street is the white van man, where once the post office van used to park up twice a week. Now the commerce is done online, and the only interaction is a brief enquiry as to where you can stick the parcel you bought on Amazon; and an impatient toot of the horn - often from the next white van man, delayed in the act of dropping off a similar shopping list to the house next door.

We used to call them delivery drivers. Now they’re the marginalised foot soldiers for the app-store stores, feeding the digital demands of the couch-potato generation. An army of self-sort-of-employed, whose job description defies description, and whose working status is best described as binary: be on call or don’t get paid at all.

In the days when working nine to five can mean getting “am” and “pm” muddled up; and the working week can mean working without getting weak at the knees, you need to know your status from the beginning. Get yourself defined, before the taxman gives you a call and makes the choices for you.

A job in the gig economy, maybe even as a part of an album of employment opportunities, is a complex position that Springfords can help make simple.

For employers who rely on a relay of eager distributors, ready to jump at a moment’s notice to turn that “click to send” into a knock of delivery, the complexity of employment liability is just as complex as having a roster of full-time staff on the books. The economics may stack up, but so to do the tax obligations.

Legislation may soon be proposed, which introduces the status of dependent contractor, a relationship that demands a much more formal partnership between employer and employee. It’s as much a step-change as going from pub jam session to full-blown national tour. To keep things harmonious, it’s time to tune up.

The much-anticipated Taylor Review, looking into modern working practices, says businesses in the gig economy would have to pay more tax, where their relationship is deemed "controlling and supervisory". If your bicycle battalion think of you as either their controller or their supervisor, this could be you. If you think you’re controlled or supervised, right down to your lyrca shorts, your status might be changing too.

Whether employee of the weak, or employer for the stronger, Springfords has the right advice for you. The report has called the proposals “the most radical reform of employment rights in a generation”. That could well be the case. A duet with Springfords could be music to the ears of all concerned, before employment tax problems come back for an encore in the gig economy.

About the Springfords blog

springfords blog

Some news, views and comments about everything and anything, relevant and irreverent.

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