Formal employment of Taxi Dancers/Taxis to be paid..........

[Lynn]

I have to say, having worked a little for HM C&E (back when they were separate from IR), that I doubt that they would be worried about benefits in kind, which, for most people, might amount to a couple of free nights a month, and maybe £5 in tax. In the same way that C&E weren't particularly worried about someone bringing back an extra bottle of vodka and 200 fags.

It's really not worth their while to chase up.

It wouldn't be for the individuals. But if this level of 'benefit in kind' is taxable - does that then mean that the person providing the benefit needs to also pay NIC on it? (I have no idea, just wondering.) If that were the case, it might be more worthwhile chasing up the provider of the benefits.

[gettingagrip!!]

Isn`t the decisive factor in all of this is going to be supply and demand? if there is an endless supply of people wanting to taxi then they`ll have more scope for a more formal approach, if as i suspect they are in need of more taxi dancers, demo`s and teachers then they will have less scope?? i`m not entirely sure things such as employment law or the wording of contracts etc etc etc has been given as much consideration by the MJ companies as it has on this forum!

[robd]

Is there now be an <OCA> </OCA> presence on the forum in the vein of Gus's ODA ?

Oops, forgot the forum ate &lt; and &gt; characters

It should read 'Is there now be an {OCA} {/OCA} presence on the forum in the vein of Gus's ODA ?'

Still not funny but at least comprehensible now.

[Groovemeister]

Would anyone care to speculate whether this would also apply to demos?

Yes it does

[El Salsero Gringo]

On the subject of whether free entry is taxable as a benefit in kind (and because I like reading HMRC publications) I note this: "the general rule is that the value for tax purposes of a benefit or facility provided for an employee or the employee’s family or household is the expense incurred by the employer (or the provider of the benefit) in providing the benefit," (from this publication).

Since the marginal cost to the provider of allowing free entry to a venue is nill, there's presumably no taxable value to the benefit. So arguments purely on a tax basis fall by the wayside.

[DavidY]

If nothing else, it's poor news management to announce a change, without announcing the accompanying benefits that are expected to accompany it.

DavidY, would you be able to post a copy of the email, or is it confidential? Does it give any explanations?

Not sure if it's confidential (so I'm not going to quote it), but there was a lot of accompanying detail explanations, including pay rates (which again I'm not going to quote).

However, while it doesn't say exactly why, it does definitely imply that they didn't have any choice on the pay issue, so I guess this will affect others sooner or later.

[DavidY]

On the subject of whether free entry is taxable as a benefit in kind (and because I like reading HMRC publications) I note this: "the general rule is that the value for tax purposes of a benefit or facility provided for an employee or the employee’s family or household is the expense incurred by the employer (or the provider of the benefit) in providing the benefit," (from this publication).

Since the marginal cost to the provider of allowing free entry to a venue is nill, there's presumably no taxable value to the benefit. So arguments purely on a tax basis fall by the wayside.

..and in fact the franchisee may benefit from having good dancers (which hopefully includes taxis) in a particular night, as the number of good dancers will raise the attractiveness of a venue to others (look at how many threads on this forum are trying to find out who's going where).

So the marginal cost of giving us free admission may even be negative...

[JonD]

I'd like to know, therefore (honestly, and without meaning to sound disputative) what this category of worker is, how it arises, how it differs from the statutory requirements pertaining to employees and so on.

We employ people to collate and pack items in their own homes. If we have a job that requires this kind of activity we ring our "outworkers" and ask them if they are available to do the work, if we have no work of this kind we do not ring them. If they want to do the work they say "yes", if they don't then say "no". We have no obligation to offer them work (and so no obligation to pay them a regular salary) and they have no obligation to do any work for us at all. So, there is no mutuality of obligation and there is no contract. It suits both sides.

Our responsibilities extend to ensuring their Health & Safety as far as we can (more onerous than you might think), we cannot discriminate on grounds that are illegal (not that we would anyway) and we must calculate their piece rate so that they can earn minimum wage and add an element of holiday pay.

What's confusing me is that in no other source, newspapers, online, HMRC publications, anywhere, have I heard of such a thing as a 'worker' who is not an employee.

Try this: Your People Manager. I can't find the definitive DTI documents - they've moved them after changing their URL to "direct.gov.uk". If you have time, search for "mutuality of obligation" and trawl through the results for the source rather than the discussion documents - and I'd be grateful for the link.

HMRC have different concerns and different definitions - which is one of the reasons why employing staff is so expensive; there is no harmonisation between different Departments of State.

I hope that is helpful.

[Groovemeister]

We have been spoken too at length about this at St. Neots as it is where they are trying it out.

It is a sweeping change for everyone involved in Ceroc franchises teachers, Demos and event managers certianly within the Ceroc Central area anyway.

Apart from the teachers and demos(as the teachers choose them) everyone else will have to apply for the jobs on offer.

There will also be less Taxi dancers( the name is changing by the way to hosts) as the Teachers and Demos will be required to take on more of the (hosts) taxi's roll.

There are a number of other things that will change as well but I can't remember them all now as it was a couple of weeks ago. Including a price rise though I believe. This will probably make up the difference for paying minimum wage.

As for career progression, I asked this question and it isn't something that would be offered.

I don't think all of this has been finalised yet but you can see there is definitely chnage on the way

[El Salsero Gringo]

HMRC have different concerns and different definitions - which is one of the reasons why employing staff is so expensive; there is no harmonisation between different Departments of State.

I hope that is helpful.

It is certainly interesting. I'm not sure that it's very helpful from a consideration of a Taxi-dancer's position though, where there is the element of obligation on both sides. I suspect that the most significant part of your post is the the sentence I've quoted. What may be considered an employee under one set of legislation might not be under another.

I'll come back to my original point though, which is that despite your inability to see a good reason for any such change, someone, somewhere, does. I'm just as interested in the benefits as to join in the carping about why it's necessarily going to be a disaster.

[ducasi]

I'll come back to my original point though, which is that despite your inability to see a good reason for any such change, someone, somewhere, does. I'm just as interested in the benefits as to join in the carping about why it's necessarily going to be a disaster.

So can you think of a substantial benefit to the taxi dancer or to the franchisee?

I can think of a few benefits on both sides, but nothing substantial enough to make it worth the bother.

[El Salsero Gringo]

So can you think of a substantial benefit to the taxi dancer or to the franchisee?

I can think of a few benefits on both sides, but nothing substantial enough to make it worth the bother.

I can see it makes more sense as part of a redesign of the whole Taxi-dancer system, if what Groovemeister says pans out. I can also see that there is some ambiguity as things stand regarding the various elements of employment law which would benefit from being clarified. Off the top of my head the biggest bonus for the franchisee I can think of is protection from the risk of months and months of legal nuisance and cost which might be generated by a disaffected taxi-dancer taking a grievance to an employment tribunal. That's a very negative reason for doing something, but not one to be discounted out of hand. As Andy says, though, I'm having a dim day, so I was hoping that the brightest of the Forum contributors could come up with something better.

[MartinHarper]

Would training of taxi dancers also be considered a benefit in kind?

[bigdjiver]

On the subject of whether free entry is taxable as a benefit in kind (and because I like reading HMRC publications) I note this: "the general rule is that the value for tax purposes of a benefit or facility provided for an employee or the employee’s family or household is the expense incurred by the employer (or the provider of the benefit) in providing the benefit," (from this publication).

Since the marginal cost to the provider of allowing free entry to a venue is nill, there's presumably no taxable value to the benefit. So arguments purely on a tax basis fall by the wayside.

There will be evidence that the dancer has regularly paid for admission, and that they have used the admit ones. It would be hard to conclude that the dancer would not have paid admission if they had not had the admit one, so it could be considered to have cost the employer that amount.

[El Salsero Gringo]

There will be evidence that the dancer has regularly paid for admission, and that they have used the admit ones. It would be hard to conclude that the dancer would not have paid admission if they had not had the admit one, so it could be considered to have cost the employer that amount.

No I don't think so - the rules are quite quite specific. Only actual out-of-pocket expenses of the employer in producing and providing the service to the employee have to be taken into account. Not indirect costs or "would-have spent instead" figures.

[bigdjiver]

..and in fact the franchisee may benefit from having good dancers (which hopefully includes taxis) in a particular night, as the number of good dancers will raise the attractiveness of a venue to others (look at how many threads on this forum are trying to find out who's going where).

So the marginal cost of giving us free admission may even be negative...

Beginners should be given free admission to encourage them to come in the first place. Once addicted they should be given free admission because they bring their friends , and when they get good they should be given free admission because they improve the attractiveness of the venue. Just about everyone gets in free , apart from the yankers, pervs, ....

[El Salsero Gringo]

Beginners should be given free admission to encourage them to come in the first place. Once addicted they should be given free admission because they bring their friends , and when they get good they should be given free admission because they improve the attractiveness of the venue. Just about everyone gets in free , apart from the yankers, pervs, ....

Just charge the teachers. Everyone else gets in free.

[JonD]

I'm just as interested in the benefits as to join in the carping about why it's necessarily going to be a disaster.

Don't you think that using the word "carping" in the context of my, and others, comments on this issue is pejorative and so not conducive to intelligent debate? Many people who have contributed to this thread have clearly thought about the issues and are giving their honest opinion. I would not characterise them as "carping".

HMRC deal with tax issues, DTI deal with the rights of workers and employees and both areas must be considered. It isn't simply a tax issue.

I'm not going to rehearse all the arguments relating to this form of employment from the taxi dancer's perspective. There are many and they vary according to the individual circumstances of the taxi dancer. However, being paid at minimum wage, currently £5.35 (there is some debate as to whether the lower "youth rate" is in breach of the recent age discrimination legislation) is a clear benefit to those on low incomes and welfare benefits. If memory serves, someone on benefit can work a maximum of 16 hours per week and so would be able to pocket up an additional £85.60 per week which is not to be sneezed at. (I'm not going to debate whether they would cross tax and NI thresholds and the effect of that).

For those in employment you need to deduct tax and NI contributions at, let's say, 29%. I doubt if many of us would have the opportunity or desire to taxi five nights per week; indeed I suspect that most people taxi one night (say 3 hours) per fortnight, giving a gross income of £417.30 p.a. That's £34.77 gross per month, say £25 net. That would pay for a week of last minute holiday somewhere or about 2 dance weekenders including travel costs.

Off the top of my head the biggest bonus for the franchisee I can think of is protection from the risk of months and months of legal nuisance and cost which might be generated by a disaffected taxi-dancer taking a grievance to an employment tribunal.

As I've pointed out at some length, moving someone from "worker" status to "employee" status DECREASES the business's protection from this sort of thing. "Workers", which is my understanding of the current status of taxi dancers despite the fact that they receive a benefit in kind in lieu of wages*, enjoy substantially fewer rights under employment legislation than "employees". (*I'd not want to get into a legal case to determine the exact definition between "employee", "worker" or "volunteer" - and that's the only way you'd get a definition).

I remain at a complete loss as to where the business benefit lies. It seems to me that you can revamp the taxi dancer system without changing the staus of the taxis themselves. You can expose "workers" and "employees" to the same training and motivational activity and I doubt if any anti-competition, anti-collusion or other restrictive covenants in employment contracts would be worth the paper they are written on. You might be able to recover a proportion of the cost of training if the recipient left within a reasonable time frame - but what is the cost of the law suit to achieve that?

As you say, if Ceroc are implementing this policy they must have identified something that justifies the outlay, administrative costs, and risk of employment tribunals to themselves and their franchisees. It would be interesting to discover what that benefit is as it might also be of benefit to my business.

Would training of taxi dancers also be considered a benefit in kind?

No, but the taxi dancers would be paid for attending the training.

[El Salsero Gringo]

As I've pointed out at some length, moving someone from "worker" status to "employee" status DECREASES the business's protection from this sort of thing.

You are correct; but that is not the point under discussion. The argument would go like this: that Taxi dancers are *already* de-facto employees. To fail to recognise this fact places the franchisee at greater risk because a)he or she may fail to understand and abide by their responsibilities and b)could be seen to be deliberately attempting to flout those responsibilities. You can make the same arguments with respect to the insurance requirements of employers. If a court decides after the fact that the Taxi dancer was an employee all along, but the insurance company declines to cover a claim because it feels it has been mislead then guess whose pocket will be used to fill the gap?

In this hypothetical situation, it's not a case of re-categorising the Taxi dancer; it's a case of owning up to, and regularising the extant position.

[JonD]

In this hypothetical situation, it's not a case of re-categorising the Taxi dancer; it's a case of owning up to, and regularising the extant position.

Are you a lawyer?! I'd have expected Trampy to be pushing for this approach. This kind of thing is defined by case law and being the subject of that defining case is a nightmare. The DTI definitions are pretty clear - if there is no mutuality of obligation then the worker is excluded from the sections of employment law defined in the link I provided. My understanding is that Ceroc taxi dancers, like Floorplay coaches are de-facto "workers". HMRC may take a different view on the tax/NI situation but I sincerely hope that they aren't reading this thread.

I doubt if insurance provisions come into it - people you pay (in whatever form - benefit or cash), no matter if they are a "worker" or an "employee", are covered by your liability insurance. If they aren't then you need to buy a better policy. We buy insurance against employment disputes (which, incidently, costs about the same as our general commercial insurance) which includes advice on compliance and we consult them about issues relating to both "employees" and "workers". You can't, to my knowledge, buy insurance against underpaid tax or NI, you'll just have to stump up if you are deemed to have underpaid for any reason. You can, however, buy insurance to cover the costs of being subject to an HMRC investigation (yes, we have that as well).