Past Years' Holiday Pay Can Now Be Claimed!
Mark Taylor LL.B (Hons) LL.M - June 2009

The House of Lords have just announced in the Stringer v HM Revenue & Customs (HMRC) case (previously referred to as Ainsworth) that workers will now be able to claim unpaid holiday pay for the entirety of the engagement and not just for their current leave year. The decision has massive financial ramifications for businesses who engage self-employed subcontractors:

  • There is now no cut off for backdated holiday pay claims. Claims are no longer limited to the current annual leave year.
  • In the case of Canada Life v Gray (when past holiday pay years could previously be claimed) the amount awarded was over £30,000 just for holiday pay.
  • Given that the annual holiday entitlement has now risen to 28 days per year the amount of holiday pay due will increase even more.
  • You can be self-employed yet still be a ‘Worker’ entitled to paid holiday

With this important change in employment law, there has never been a more important time to make sure that your self-employed subcontractors are not classified as Workers. If they are and you do not pay them holiday pay then they can make a claim for the entirety of the engagement and not just the current leave year. Holiday pay claims will not now just be a nuisance they will be a financial disaster.

You need to ask yourself the following questions:

  • Do you engage self-employed subcontractors?
  • Have some of your subcontractors been engaged for a number of years?
  • Can you afford to pay them holiday pay?
  • Can you afford to pay a Tribunal judgment for holiday pay for all the years they have been engaged?
  • Are you confident that if one subcontractor succeeds that others will not make claims as well?
  • Are you confident that you can prove the subcontractors are not Workers?

If you think you may have a problem then contact Accountax: we can help. We can represent you in a Tribunal and can draft or review self-employed contracts to ensure you are shielded from claims.

Contact Mark Taylor at Accountax on 08450 660035 or email: marktaylor@accountax-ltd.com.

Nobody has a better track record than Accountax in defending holiday pay claims and now that the liability for you has just got apocalyptically bigger; can you afford not to use the best?