HMRC v Stringer – Warning over IT Contractor Holiday Pay Claims

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This article was supplied by top Umbrella Company Danbro.

HMRC v Stringer

Specialist accountants for contractors, Danbro, are advising businesses that engage self-employed sub contractors to ensure they cannot be classified as workers.

Following the HMRC V Stringer case last month, the House of Lords ruled that workers can in fact accrue paid holiday for their entire sick leave and are entitled to take it on their return or be paid in lieu if their employment ends.

As a result, the existing UK Working Time Regulations, which required employees to use all holiday leave within the current year or else it was lost, is no longer in effect.

Exposed

This potentially leaves businesses exposed to back-dated claims for several thousands of pounds – particularly since the annual holiday entitlement has risen to 28 days.

Genuine contractors and freelancers are not entitled to holiday pay, but anyone who has not been operating through an umbrella or limited company service could still be classed as a ‘˜worker‘, which would mean they are entitled to holiday pay, and other benefits.

Danbro‘s Gerry Gregoire said: ‘Now more than ever, any company employing self-employed contractors needs to ensure that they cannot be classified as workers.’

Times of Uncertainty

In these times of uncertainty where businesses are trying to focus their efforts on surviving one of the most deep rooted recessions on record, they will find that by effectively managing their payroll, they can remove the risk of their self-employed contractors being deemed as workers.

This effectively would prevent them, from being able to take further accrued annual leave after long periods of sickness among other employee benefits.

Contact Details

If you are worried about the risks that this new legislation could impose on you and your company, contact one of Danbro‘s specialist advisors for no obligation, impartial advice on:

Head Office: 01253 600140
London Office: 0207 836 84000
Manchester Office: 0161 238 4918
Enquiries [email protected]
or visit www.danbro.co.uk

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