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Are you on a low tax diet?

Is a leader of a Weight Watchers group an ‘employee’ for tax purposes?

The legal status of an individual who provides work for another is often not as clear cut as it may sometimes appear.

Being an employee gives individuals certain rights that self-employed individuals do not have such as the right not to be unfairly dismissed and statutory redundancy payments. Often there are circumstances when an individual would prefer to be self-employed as opposed to an employee as it gives them more freedom to work for others and to potentially benefit from self-employed tax status.

In the recent case of Weight Watchers (UK) Ltd (‘WWUK’) v HMRC, Leaders of WWUK signed contracts which on the face of it, expressly stated that they were independent contractors and therefore not employees of WWUK. However, HMRC thought otherwise and sought to clarify their tax status and recover PAYE and NI contributions.

The Upper Tax Tribunal held that the Leaders were required to provide their services personally to WWUK and that WWUK placed a high degree of control on the Leaders who were expected to turn up and conduct meetings at a certain time and place each week. The Leaders were therefore employees. Whilst not definitive on employment status for the purposes of unfair dismissal, this finding would support any argument that they were ‘employees’ for that purpose and so liable to pay PAYE and NI.

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