Self-employment (Hansard, 10 March 1993)

§ Mr. French
To ask the Chancellor of the Exchequer how many individuals who claim self-employed status each year are subsequently found to be employed.
570W

§ Mr. Dorrell
This information is not available centrally.

§ Mr. French
To ask the Chancellor of the Exchequer if he has any plans to review the principles of contract of service and contract for services in distinguishing between employed and self-employed status.

§ Mr. Dorrell
The principles of contract of service and contract for services are matters of general law. The application of these principles to the question of employment status for tax purposes is kept under review.

§ Mr. French
To ask the Chancellor of the Exchequer in what circumstances the Inland Revenue treats an individual with one source of income as self-employed.

§ Mr. Dorrell
Whether or not an individual is self-employed is a question of fact and law, and depends on the terms of the engagement concerned, rather than the number of sources of income.

§ Mr. French
To ask the Chancellor of the Exchequer if he will set out the criteria applied by the Inland Revenue in determining whether an individual is self-employed; and if he will make a statement.

§ Mr. Dorrell
Guidelines to help an individual decide whether he or she is self-employed or an employee are set out in the Inland Revenue leaflet IR56/N139. These are summarised briefly in the table. But the criteria must be considered as a whole. Any one of them is unlikely to be sufficient in itself and the relative weight to be given to each may vary accordingly to the particular circumstances of the case.
Does the individual have a final say in how the business is run? Does the individual risk money in the business? And is the individual responsible for meeting losses as well as taking profits? Does the individual have to do the work themselves, or can they hire someone to do the work (and pay them out of their own pocket)? Does someone else tell them what to do? Does the individual provide major items of equipment necessary to do the job? Does the individual have to work at the premises of the work provider? Is the individual paid by the hour, week or month, or for a specific piece of work?