It is important for an employer to be clear about whether an employee is an employee or actually self-employed. It is essential that an employer does not miscategorise a worker’s genuine status, either intentionally or unintentionally because there are significant tax and employment legislation issues in particular surrounding a worker’s status. If a worker is deemed to be an employee then they will be subject to different tax rates and they will enjoy all the protection that employment legislation affords such as the right to annual leave, public holidays, maternity leave, parental leave, etc. and most importantly they retain the ability to take an unfair dismissal claim.

The key to whether an employee is self-employed or not lies in the relationship between employee and employer and what happens in practice in that relationship.