Uber Plans Millions in Back Pay After Shortchanging NYC Drivers

Re:Uber Plans Millions in Back Pay After Shortchanging NYC D... by manarth on Tuesday May 23, 2017 @04:58PM (#14405285)

  If you report income as an independent contractor/self-employment,
  you pay both sides of it (since otherwise people would artificially
  class themselves as contractors to pay less).

In general, that's true in the UK, but because of the various allowances, categories, and thresholds, if Uber is a contracting company, and the drivers are individual freelancers/contractors, less tax is paid.

There are complicated rules to ensure this is only allowed in cases of genuine freelancing/self-employment (IR35 is one part of those rules), but Uber has previously lost court cases on parts of those rules, where drivers were ruled to be employees rather than freelancers [1].

In IT consultancy (and other high-paid jobs), it's generally more tax-efficient for the worker to be an independent contractor (but has to satisfy various rules to do so). For lower-paid jobs like driving for Uber (and the general "gig economy"), it's in the companies' interest to label the worker as "self-employed", which means the worker misses out on all sorts of worker protection regulations whilst the employer saves on costs and taxes. Many companies skirt the limit of the regulations, and end up in court as a result.

[1] https://www.theguardian.com/technology/2016/oct/28/uber-uk-t...

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Re:Uber Plans Millions in Back Pay After Shortchanging NYC D... by SilasX on Wednesday May 24, 2017 @01:23PM (#14411712)

Strange. In most discussions, I've found UK law to be much more logical than US, but this discussion has revealed two notable counterexamples:

1) That your tax rate can be lower under self-employment classification (incentivizing spurious misclassifications).

2) That roads are paid for through income tax (rather than petrol or odometer tax), which is only loosely correlated with road usage and which punishes people who economize on it, while subsidizing above average users.

In any case, you can't really pin 2) on Uber, which isn't getting any more of a subsidy than any other business using the "road platform". They were abusing the law for 1) but courts have since put a stop to it.

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