Employmed / Worker / Self Employed

From a tax perspective there are 2 categories of ‘worker’ a) employed and b) self employed. The situation is complicated somewhat when IR35 is considered.

IR35 can result in a person being employed by a company (their own personal service company) but being taxed as though they were employed by another company, The other company is the company which is a client of their personal service company.

Employment law has brought in a third category; the three categories being a) employed b) self employed and c) worker.  A worker is someone who is  self employed or employed by their own personal service company, but who carries out work for another business. Genrally speaking a ‘worker’ is entitled to the same employment rights as an employee, despite not being an employee.

The result is that a person, who it is concluded to be a worker, who is employed by their own personal service company, can sue for unfair dismissal the client of their personal service company.