Recommendation 2

We are concerned that it is too difficult for workers to challenge incorrect status determinations. The absence of a clear definition of self-employment, and limited access to relevant personal information for each contractor, can make it challenging for hiring organisations to make status determinations confidently. Hiring organisations can face significant financial consequences if they incorrectly assess someone as self-employed, and this risk may affect their determinations. Workers can challenge decisions with the hiring organisation, but they have no independent route to appeal. The hirer must respond formally to an appeal from a contractor within 45 days. However, if they do not change the status, the worker has no further recourse other than to seek a refund from HMRC by completing their self-assessment return on a self-employed basis. It is unclear how effectively these routes operate in practice and the extent to which they are used, because HMRC does not monitor this. Recommendation: HMRC should ensure there is a fast and independent process for contractors to resolve disputes over status determinations. As part of this, it should assess the extent to which workers are using existing appeals routes, and how well they are working.