24 Jan 2019

A fifth of freelance grooms are subject to false self-employment

“Horse and Hound once again drew attention to the misconceptions surrounding employed and “self-employed” staff in the equestrian industries.   A British Grooms Association (BGA) survey found that almost 20% of staff had been told that they were self-employed, when in fact, legally speaking, they should be classed as employed.  It is an important distinction, as employed staff have more rights and protections than the self-employed, who very often have no legal employment rights at all. For some, this is a fair trade off for the flexibility and independence of the truly self-employed, but for others the label is misleading and means they could lose out on such things as paid holidays, the security of having their tax and National Insurance paid regularly and maternity/paternity leave.

Employing staff on a supposedly self employed basis whilst their working practice overwhelmingly suggests or even further, states that they are in fact employed is illegal and this can apply to both parties. But in many cases, it is not a deliberate ploy on the part of the employer or the worker to avoid offering benefits or to evade tax, but just a lack of knowledge about what the difference is and when it can be applied.  Lucy Katan from the BGA explained that it is not necessarily about what a contract says, but what the “relationship” between the parties actually is once held up to scrutiny. Each case will turn on its own facts. For instance, a self employed person will have much more control over their own working hours, holidays, sick leave, that sort of thing. In fact, far from there being a contract of work given to them by an employer, a self employed person will often be the one to hand a contract, or a document stating the Terms and Conditions of their business to the proposed “employer”, who should perhaps be known as a client in those circumstances.  As an HMRC spokesman, quoted in the Horse and Hound article says:

“Employment status in the UK is determined by the reality of the working relationship and not simply by the terms of any contract. Individuals cannot be opted out of employment rights and protections simply by being labelled as self-employed”

Interestingly, the Editor-in Chief of Horse and Hound, Sarah Jenkins, uses the issues in the article for her comment piece at the beginning of the magazine.  She comments on how the industry “has made itself an easy target for investigation” because of its working practices. This means that HMRC could begin to see the industry as somewhere it could benefit from looking at more closely in terms of collecting more tax. But she does also raise the query as to how the equestrian world would cope if everyone paid staff “by the book”, given that it often exists on a shoestring and by “avoiding actual costs”. Neither the ABRS nor the BGA would support any illegal practices and nor would they support inadequate pay and poor conditions for workers in any part of the industry, be they employed or self employed. But she does have a point. Historically, those who work with horses do it in the main because they love horses and all that goes with them. But love won’t pay the rent. The awkward question has to be asked that if a business is only  surviving by not just cutting costs, which is fair enough, but by trying to avoid costs altogether such that others have to lose out, is it a business at all? As Sarah says, a much wider dilemma.

If you would like more information about employment issues, then the BGA would be a very good place to start and you can use your ABRS membership to access them”

The full survey report can be found here.