Employment status: employee, worker and self-employed

Every argument in this archive comes back to one question: whether a person who does work for another is an employee, a worker, or self-employed and in business on their own account. Employment law asks it to decide rights. Tax law asks it to decide how income is taxed, with only two categories rather than three. The two systems apply broadly the same tests and often reach different answers.

The tests

The framework comes from Ready Mixed Concrete in 1968: a contract of employment requires personal service, control by the employer, and mutuality of obligation, with the other terms of the relationship consistent with employment. The right to send a substitute negates personal service if it is real, as the Supreme Court explained in Pimlico Plumbers v Smith in 2018, where a right limited to other plumbers of the same firm was held not to count. Control means the right to direct what, when, where and how, not whether it is exercised. Mutuality of obligation, the most contested element, was narrowed by the Supreme Court in the PGMOL referees case in September 2024 to the obligations within each engagement, not across them, and the First-tier Tribunal applying that ruling in 2026 found the referees were not employees.

Worker status

Between employee and self-employed sits the worker: someone who contracts to do work personally for another who is not their client or customer. Workers have the minimum wage, holiday pay and protection from discrimination but not unfair dismissal rights. The gig economy cases of the 2010s, from Uber to Pimlico, expanded the category. The Taylor review of July 2017 proposed renaming it dependent contractor and defining it in statute, and proposed that tax and employment definitions be aligned. Neither has happened; the government's 2026 employment rights legislation set the single worker status idea aside.

Tax and rights

For contractors the consequence is the one the industry has complained of since 2000: a person can be taxed as an employee under IR35 and have no employment rights, or be a worker for rights and self-employed for tax. The Freelancer and Contractor Services Association's first ask of the 2026 Budget was a statutory employment status test with a bright line, on the argument that every other reform is built on sand until status is settled.

Reading the archive

The articles below gather the archive's coverage of status cases and reviews: IR35 tribunal decisions, the gig economy rulings, the Taylor review and the 2018 consultations, and the 2026 debate on a statutory test. For the tax rule that turns on status, see the IR35 and off-payroll hubs.