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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Latest Employment News

Right to work guidance updated on Digital Verification Service checks

The Home Office has issued an updated version of its ‘Employer’s guide to right to work checks’ document, with the changes primarily related to simplifying the information on digital checks for employers of British and Irish citizens who have a valid passport (or Irish passport card). The new version has removed various technical details which were previously intended for providers of these digital verification services, and revised the relevant terminology, so that ‘Digital Verification Service (DVS)’ now includes both the terms Identity Service Providers (IDSPs) and Identity Document Validation Technology (IDVT). This is stated to align the guidance with the terminology used in the UK digital identity and attributes framework and the Data (Use and Access) Act 2025. Guidance and requirements specifically for DVS are now set out in a separate, supplementary code for digital right to work checks. The relevant guidance for employers has been revised. Although it is not currently mandatory for employers to use a DVS certified against the ‘trust framework’ and the supplementary code, this position will change ‘in the near future’, and it will become mandatory to use a DVS listed on the register of certified DVS (maintained by the Office for Digital Identities and Attributes (OfDIA)). In other changes, the new version reiterates that an original expired BRP is not proof of a right to work, and instead an online check must be taken. It also confirms that short-term entry clearance vignettes are being phased out, and that increasingly persons recently issued entry clearance will only have their eVisa to rely on for these purposes, so will need to create a UKVI account as soon as possible and can do this from overseas. In relation to asylum seekers with a pending claim, the guidance now states that they can also volunteer whilst their claim is considered without being granted permission to work, but they can only carry out 'paid' work if they have been granted permission to work under the Immigration Rules, Part 11, paras 360 or 360C. Previously the reference in our quotation marks to ‘paid’ work stated ‘voluntary’ work

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