Produced by Tolley and written by Anne Redston
  • 21 Dec 2021 16:44

The following Employment Tax guidance note Produced by Tolley and written by Anne Redston provides comprehensive and up to date tax information covering:

  • Establishing employment status
  • The contract
  • Is the written contract decisive?
  • The position for most contracts
  • Contracts between engagers and individuals
  • What are the consequences of Uber and Autoclenz?
  • Check Employment Status for Tax (CEST)
  • Recategorisation by HMRC
  • HMRC determination
  • Challenging recategorisation
  • More...

Establishing employment status

Anne is a barrister who sits as a judge of the First-tier Tax Tribunal. The commentary in this guidance note is her personal view as she is not authorised to write on behalf of the Tribunals Service or the judiciary.

This note explains how to work out whether a person is employed or self-employed. It considers the NIC deeming rules, the contractual relationship between the parties, HMRC’s Check Employment Status for Tax (‘CEST’) online tool and the HMRC status determinations, together with how these can be challenged. The reasons why status is important are explained in the Employment status ― why it matters guidance note.

Remember that this note, and the other notes on employment status, are only a summary, and you may need to take further advice. For the position where individuals are working through personal service companies, see the Personal service companies ― overview guidance note.

In July 2017, the Taylor Review recommended several significant changes to the current legal position. This Review, and the subsequent developments, are briefly discussed in the Employment status ― why it matters guidance note.

The contract

For tax purposes, the question of whether people are employed or self-employed is established by the contracts between individuals and their engagers, together with the case law that has built up from interpreting such contracts. The position is usually the same for NIC, unless certain deeming rules apply. These are discussed at the end of this note.

Sometimes the contract between the engager and the individual will be written,

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Popular Articles

‘Bed and breakfasting’ with shares

‘Bed and breakfasting’ was the pre-1998 practice of selling shares and repurchasing them the following day. This technique can still be used in a modified form to achieve capital gains tax (CGT) savings for current or future tax years using:•a spouse / civil partner•a self-invested pension plan

04 Jan 2022 11:11 | Produced by Tolley Read more Read more

Structures and buildings allowance

What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced

05 Jan 2022 14:50 | Produced by Tolley Read more Read more

Exemption ― overview ― items that are exempt from VAT

List of supplies that are exempt from VATThe goods or services that are exempt from VAT are listed under various group headings within VATA 1994, Sch 9.It is important to remember that not all supplies that come within a heading will be exempt from VAT. For example, income from the placing of bets

22 Dec 2021 18:48 | Produced by Tolley Read more Read more