§ Lord Houghton of Sowerbyasked Her Majesty's Government:
What is the definition of "self-employed" for the purposes of personal taxation and social security respectively; and whether each department takes a separate decision on claims to be self-employed.
The Earl of CaithnessThere is no precise definition of self-employment for either tax or social security purposes. In general whether somebody is liable for tax and national insurance contributions as a self-employed person depends on whether they are working under a contract for services or a contract of service. This in turn depends on the facts and circumstances of an engagement, interpreted in accordance with a number of long-standing and well-known criteria laid down by the courts and industrial tribunals in a series of tax and employment cases. The Inland Revenue and the Department of Social Security have agreed that, in general, a considered, written ruling by one department is binding on the other provided all the relevant facts have been accurately and clearly disclosed and the circumstances remain the same. However, there are special rules about the national insurance contributions certain workers should pay.