Key Ruling in the Long Running Self Employed or Employed Argument

Is your workforce employed or self-employed? The recent high profile case involving Uber drivers may well have connotations for other employers operating businesses on a similar basis.

The question as to whether your workforce or parts of it is classed as employed or self-employed has been a source of contention between businesses and HMRC for many years.

The issue of employment status is considered serious by HMRC, which is keen to get to the bottom of whether claims by business owners that its workforce is self-employed are genuine. If workers are deemed to be employed rather than employed, then the business owner is liable for making tax and National Insurance contributions. Obviously HMRC is eager to ensure it is receiving all the contributions it should.

Uber Judgement: Drivers ARE Workers

Just in the past few days and in one of the most high profile cases of its kind, the Employment Appeal Tribunal (EAT) has confirmed that drivers for the well-known taxi firm Uber should be classed as workers who are entitled to basic employment rights.

It was the Uber drivers who argued that they should be classed as workers. In Aslam and others v Uber BV and others, the Employment Tribunal held that the drivers are entitled to receive paid annual leave and to earn the National Minimum Wage, amongst other benefits.

Numerous factors played a part in the ruling. Whilst Uber drivers are able to make their own choice as to where and when they work, they are subject to an interview and induction process and can be dropped if they fail to perform or are found guilty of serious misconduct, following a set warning process.

The drivers however have to work exclusively for Uber, which is a key indicator in establishing whether a relationship is employment based.

There have been other high profile cases in the past, for example Addison Lee, which met with the same ruling as Uber. Deliveroo and CitySprint came under similar scrutiny.

What Now for the Gig Economy?

The gig economy – the blanket name for the type of working arrangement that these companies follow – has in the past involved numerous companies attempting to shroud their workforce arrangements undercover of a self-employment basis. However, courts and tribunals have recently uncovered the fact that they are in fact employment based agreements.

The recent Uber ruling will have far reaching connotations for its 40,000 or so strong workforce. It is thought that many of the drivers will seek to make back-dated claims for minimum earnings, holiday pay and other such benefits that they should have been entitled to since they were taken on.

TUC general secretary Frances O’Grady said: “This ruling should put gig economy employers on notice. Unions will expose nasty schemes that try and cheat workers out of the minimum wage and holiday pay. Sham self-employment exploits people and scams the taxman.” 

Be Sure to Check the Employment Status of Your Workforce

It is crucial for business owners to be clear on how their relationships with their workforces will be construed by HMRC.

If you are unsure as to whether your workforce should be classed as employed or self-employed, discuss it with your local bookkeepers. They’ll advise you as to the correct status so that you can take appropriate steps to ensure your business is risk free in this respect.

The Importance of Getting Your Buildings Reinstatement Value Right

The property from which you operate your business is obviously of vital importance. What would you do if it was completely wiped out? No doubt you’d rely on your buildings insurance to cover you for full reinstatement.

If this is the case, then you’ll need to check something vitally important: that your buildings reinstatement value has been quoted correctly on your insurance policy. If it hasn’t then you won’t be adequately covered, which means you won’t be paid the amount you need to get your premises back to where it was or to cover your incurred costs during its rebuild.

One of the most common mistakes made when insuring commercial premises is with the reinstatement value. A lot of people believe that the reinstatement value, also known as the ‘Declared Value’ or rebuild value, tallies with the current market value of the property. This is not the case however.

What is Reinstatement Value?

Reinstatement value refers to how much it would cost to completely rebuild a property from scratch. As well as the actual rebuild itself, the value will include other factors such as site clearance, debris removal and professional fees for surveyors and architects.

If you get the reinstatement value wrong then you could end up underinsured, which means your insurer will only pay out a proportion of the total rebuild cost, and that will be directly connected to the amount by which you are underinsured.

So for example, you have insured your commercial property at a Declared Value of £100,000. The actual rebuild cost runs to £300,000 however. The insurer will only pay out a third of any claim you make.

It is therefore a false economy to declare a lower rebuild cost, even if it appears tempting in order to keep the premium down.

How to Calculate the Correct Reinstatement Value

You can obtain a reasonably accurate reinstatement value from a recent mortgage offer. However, the most accurate figure and perhaps the only 100 per cent guaranteed one will come from a qualified buildings surveyor’s report. Their report will follow a detailed inspection and will therefore be completely accurate, as well as being something you can totally rely upon.

Bear in mind that reinstatement values should be regularly reviewed, as costs do rise.

The good thing about investing in a professionally calculated reinstatement value is that it could well uncover the fact that you are paying more than you should be for your buildings insurance.

GDPR Essentials for Businesses

Back in August we wrote about how a new Data Protection Bill was set to be published in September this year which would bring the EU’s General Data Protection Regulation (GDPR) into UK law.

GDPR is now officially due to come into force on 25^th May 2018 and will mark the most wide-ranging change to global privacy law in two decades.

GDPR will apply to any organisation that provides goods or services to or tracks or creates profiles of EU citizens. Brexit won’t stop its introduction, especially as until March 2019 we remain part of the EU, but in any case it is widely believed that the UK will adopt its own legislation that will incorporate the GDPR legislation.

GDPR should in theory make the business owner’s life easier because there will be clarity as to how they should be controlling data. There are all sorts of new rules that must be followed, with failure to do so resulting in substantial fines that could reach €20 million or four per cent of group global turnover.

How to be GDPR Compliant

As a business, there are three key areas in which you’re going to need to ensure you are compliant.

Consent

Anyone you wish to contact for marketing purposes must have opted in to receive communications from you via a ‘clear, affirmative action’. You are no longer permitted to use pre-ticked boxes hidden away at the end of a form or terms and conditions. Neither can any wording that relates to receiving marketing communications be ambiguous or unclear. Opt-outs are no longer allowed; GDPR heralds the age of the opt-in. It’s going to be necessary to cleanse existing mailing lists so that everyone opts in under the new rules, otherwise you will no longer be able to contact them after May 2018.

Right to be forgotten

You can no longer keep data for any longer than you need to, and for anything other than its intended purposes. Data must not be kept indefinitely and any EU citizen will retain the right to request that their data is removed where no legitimate reason exists to process it.

Personal data processing

Data can no longer be held just for the sake of it. A legitimate reason must exist for you to have brought data together. You must also have a clear reason concerning what you intend to do with the data and for how long you will need to use it. You’ll need to be upfront with consumers as to this information.

Time to get ready for GDPR

There is no time to waste in preparing for GDPR. Whilst it may seem a long way off, the fact is there is a lot to do, and if you haven’t ensured that everything is in place by the deadline of 25^th May 2018, then you could be at risk of non-compliance fines.

If you have mailing lists that need to be opted in, you should not leave this to the last minute as consumers could well end up fed up with the bombardment of email requests by this time, which could lead to wholesale deletion.

There is useful guidance on the Information Commissioner’s Office website as to how you’ll need to comply with GDPR. You could also talk to your local bookkeepers for tailored advice on the various aspects that apply to your particular business.