Tax

This topic considers various aspects of tax law that are often encountered by employment lawyers.

For employment law purposes, an individual who provides work or services for another person may fall within three categories; they may be a worker, an employee (in which case they will also be a worker), or they may be a self-employed or independent contractor. However, from a tax perspective, an individual is either employed or self-employed; there is no third category. While some of the same caselaw is relevant to the question of employee status in the context of tax and employment law , there is now a divergence in the approach taken by the tribunals and courts in dealing with employee status for these purposes. This may mean that, even if an individual is not regarded as an employee for tax purposes, an employment tribunal may determine that they are an employee and therefore eligible to bring a claim eg for unfair dismissal or redundancy, and vice versa. For more detailed information on employee status in the context of employment law, see Practice Note: Employee status.

Employment status for tax

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PAC criticises Home Office over failures to tackle exploitation under skilled worker visa route

The Public Accounts Committee (PAC) has found that the Home Office failed to adequately address the risk of exploitation and non-compliance under the skilled worker visa scheme, particularly in the care sector. In its 4 July 2025 report, the PAC criticises the department for failing to prevent abuse following the scheme’s 2022 expansion to support adult social care, highlighting serious weaknesses in safeguarding, compliance monitoring, and tracking of visa expiries. While the expansion helped alleviate workforce shortages during the pandemic, it also exposed migrant workers to exploitation, with evidence submitted to the inquiry detailing cases of debt bondage, excessive working hours and poor living conditions. Despite early signs of abuse, the Home Office was slow to respond and does not hold data on how many visa holders have been identified as potential victims of modern slavery. The PAC further found that the department lacks key data on visa compliance, including whether workers leave the UK at the end of their stay, are re-sponsored, or remain unlawfully, and has not analysed exit check data since the route’s introduction. In light of the recent decision to end overseas recruitment for care workers, the PAC warns of further risks unless cross-government workforce strategies are coordinated and calls for a joined-up approach to tackling exploitation and addressing domestic skills shortages.

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