With HMRC cracking down on the ‘gig economy’ and with a number of recent high profile cases, including a case within the plumbing and heating industry, the Association of Plumbing & Heating Contractors (APHC) is advising plumbing and heating businesses to check the legal status of the working relationships that they have with individuals.
The employment status of an individual will affect whether they have employment rights, the tax they and the company pay and whether an individual is entitled to certain benefits such as sick pay, holiday pay and pension contributions.
John Thompson CEO of APHC, commented: “Subcontracting work on a self-employed basis to other trades people forms an important part of the plumbing and heating industry, as it enables many bone fide companies to be in a position to take on larger projects which they perhaps would not be able to manage without subcontracting elements of the work out.
“The very nature of the plumbing and heating industry means that engineers need to be as flexible as possible to meet the requirements of their customers. Engineers can quite easily find themselves in a situation where they are splitting their time between working on a small domestic gas boiler installation whilst project managing the installation of a £500,000 commercial heating system. Many of our members enjoy the variation that this brings, which ultimately wouldn’t be possible without subcontracting elements of a larger project out.
“As a trade association we would encourage all plumbing and heating companies to take action to ensure that their employment and contracting practices are compliant. As a first step, I would recommend use of the HMRC Employment Status Indicator tool to check the employment status of an individual.
“If you are in doubt or unsure then I would recommend to seek legal advice, which a good trade association should be able to provide, and have the relationship between both parties reviewed to provide confirmation of whether a self-employment situation is viable under current law.”
HMRC’s Employment Status Indicator tool can be located at www.gov.uk/guidance/employment-status-indicator.
HMRC has also published a video (shown below) to help decide the employment status of individuals for tax purposes.
