Employment status for tax categorises a worker to indicate how much income tax and National Insurance should be deducted from that worker.
Employment status for rights categorises a worker to determine the employment rights that are applicable to them, such as holiday and sick pay.
Despite being two sides to the same coin, the rules for employment status for tax and employment rights aren’t aligned. In 2017, the Taylor Review of Modern Working Practices proposed alignment of these frameworks but as yet, there has been little headway. This means that a contractor, for example, could pay the same tax as an employee (if employed for tax purposes under the IR35 legislation) but still not be automatically entitled to any employment benefits.