Weight Watchers (WW) appealed against HMRC's decision to classify the company's leaders - people who run WW meetings around the country - as employees. Leaders' contracts stated that they were independent contractors who had to pay their own tax and national insurance contributions. They had to personally conduct their own meetings at times, dates and places specifically approved by WW, or to find a suitably qualified replacement who would then be paid directly by WW. WW lost its appeal. Some of the key considerations which swung this decision in favour of leaders having employee status were:

  • WW was obliged to offer work and the leaders had to do it
  • WW exerted significant control over the leaders
  • leaders had to provide personal service. Even though they could provide substitutes, WW had a fair amount of control over this and so there wasn't a genuine right of substitution.

Why was this all such a big deal for the company? It's now got a tax bill of more than £23m, going back nine years. A hefty price to pay.

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