This subject is rarely out
of the headlines. One of the reasons for this is that the distinction between
the two is not defined in statutory law. Instead, reference must be made to
numerous Commissioners decisions and appeal cases on the issue.
This debate has been extended with IR35, which seeks
to examine the relationship between the worker and the ultimate client (where a
Limited Company exists to receive payment on behalf of the worker).
The following tips and practical points should be
borne in mind:
Ensure that there is a watertight contract and that
this contains a satisfactory substitution clause (we can provide a sample
contract, if required).
A self-employed person tends to have some control
over how he does his work. He supplies his own tools and equipment, engages in
on-going training and incurs advertising costs. The self-employed person should
engage in more than one contract during the year(the more clients, contracts or
customers the better).
Recognise that the business of defending a tax status
tends to be a complex and expensive exercise as there is no satisfactory test
in place to determine whether or not someone is self-employed or an employee.
HMRC have an extensive list of what may be taken into account here.
If you are concerned about any of the above, or if
you feel you would like some additional advice, please do not hesitate to call
me,
Mark
