Employment status tests—from a tax and NICs perspective
Produced in partnership with Anne Redston of Temple Tax Chambers
Employment status tests—from a tax and NICs perspective

The following Tax guidance note Produced in partnership with Anne Redston of Temple Tax Chambers provides comprehensive and up to date legal information covering:

  • Employment status tests—from a tax and NICs perspective
  • In business on your own account
  • Hiring staff
  • Personal service and substitution
  • Equipment
  • Financial risk and opportunity to profit
  • Control
  • Mutuality of obligation
  • Part and parcel
  • Lots of clients—the Lorimer case
  • more

This Practice Note has been written by Anne Redston, Barrister. It is her personal view; she is not authorised to speak for the Tribunals Service or the judiciary.

Whether a person is employed or self-employed has significant consequences for income tax and National Insurance contributions (NICs) purposes. There are also employment law and negligence liability implications, see Practice Note: Employment status—why it matters. This Practice Note should be read in conjunction with: Establishing employment status—from a tax and NICs perspective.

Despite the importance of the distinction between employment and self-employment, there is no clear definition of what makes someone employed or self-employed. Instead, there is an extensive collection of court decisions. From this case law, various principles have been established, known as status tests. This Practice Note explains the status tests and looks at some of the leading cases. For a decision which considers and applies many of these tests, see Braine.

This Practice Note, and the other Practice Notes on employment status, are only a summary of the applicable law and do not cover all situations.

In July 2017, the Taylor Review recommended several significant changes to the current legal position. In February 2018, as part of its response to the Taylor Review, the government published a consultation document on options for reforming and improving the employment status tests for both employment rights and

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