HC Deb 15 June 1995 vol 261 c631W
Mr. French

To ask the Chancellor of the Exchequer (1) if he will list the main groups of workers which, according to statute law, are treated for tax purposes as self-employed but for national insurance purposes as employed; [28333]

(2) in what circumstances a taxpayer may assume that a determination by the Inland Revenue that, according to case law, a person is self-employed may be taken as applicable to tax liability and national insurance contributions. [28341]

Sir George Young

There is no statutory definition of self-employment. Both the Inland Revenue and the Department of Social Security use criteria derived from the case law of the courts. They operate a common approach to employment status. This means that where one department has made a written decision following a full investigation of the circumstances, this will normally be accepted by the other department provided all the relevant facts have been accurately and clearly disclosed and the circumstances remain the same.

The exceptions are as follows:

  1. (i) Section 314 Income and Corporation Taxes Act 1988 deems that certain divers are treated as self employed for tax purposes. The normal case law approach applies for National Insurance.
  2. (ii) The Social Security (Categorisation of Earners) Regulations provide that particular groups of workers should be treated as employees whilst the Inland Revenue follow the normal case law approach. In these cases it may mean that the national insurance treatment differs from the tax treatment. The following groups of workers are affected:
    • Office Cleaners
    • Ministers of Religion
    • Part time or visiting lecturers, teachers or instructors
    • Persons employed by their spouse

Mr. French

To ask the Chancellor of the Exchequer if he will set out the differences between Inland Revenue leaflet IR56/N139 and previous leaflets since 1979 as they relate to the criteria for determining whether a person is employed or self-employed. [28340]

Sir George Young

Leaflet IR56/N139 has been updated on a number of occasions since its introduction in 1985. The latest version was published on 31 May 1995 and contains additional criteria relating to short-term engagements in the light of recent case law