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

The following Tax practice note produced in partnership with Anne Redston 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
  • More...

Employment status tests—from a tax and NICs perspective

Coronavirus (COVID-19): in light of the coronavirus crisis, the government announced temporary measures to support both the employed and the self-employed. For more detail on the support for the employed, see Practice Note: Coronavirus Job Retention Scheme (extended version 1 May to 30 September 2021), and for more detail on the support for the self-employed, see Practice Note: Self-Employment Income Support Scheme.

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, which also considers HMRC’s Check Employment Status for Tax (CEST) tool.

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

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