The Confusing IR35 Conudrum
Paul Fitzsimmons
Master of Dad Jokes, HR Support, Commercial Conveyancing, and Criminal Mastermind. 0114 478 6269
Deciding someone's employment status can be extremley tricky, and Employment Tribunals and HMRC may consider different factors when deciding status, as there’s no single legal definition.
HMRC have a great tool available which allows you to check the employment status of individuals.
The questions are completed anonymously. The result is not legally binding and HMRC don’t keep a record of the result. However it is useful to see what type of questions they ask and what you should look out for.
Are they employee's?
Presently, there’s no single legal test to determine if you’re an employee or a worker, but you’re likely to be an employee (whether on a permanent, open-ended, or on a fixed-term contract) if:
Are they self-employed?
they are likely to be self-employed if:
If they're self-employed, the contract is called a ‘contract for service’.
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Determining your employment status
There’s no one thing that completely decides this.
An Employment Tribunal will make a decision based on all the circumstances of the case to decide your status if there is a dispute between you and your employer. These are as follows.
However, none of these on their own will decide your status. One judge has described it as ‘painting a picture’ of all the details and looking at the ‘picture’ from a distance.
So, as a rule of thumb, if you answer:
In the film and TV industry, there are many people working who find it difficult to determine their status.
The most recent of these is Talksport presenter Paul Hawksbee who failed to convince the court he was a contractor. The tax liability at stake – which the presenter will now be expected to pay to HMRC – amounted to £89,758 in Income Tax and £53,368 in National Insurance Contributions.
So if you employ contractors make sure agreements are done setting these things out.
Contact me on [email protected] for any help you may need on this and other HR and Employment law issue.
Inital chats will always be given free to see how we can help.
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2 年Always on the ball with the best advice you Paul. Excellent.
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2 年Thank you for this - I have a feeling I don’t have a formal contract with an ad hoc contractor who works for me. I will look into it tomorrow (today is a non working day)
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2 年The other question you have to ask what access to these "sub contractors" to your work systems which you have little control over with no agreements
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2 年IR35 is a minefield Paul Fitzsimmons and your post is an extremely helpful analysis Thanks
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2 年So true. Whilst it isn’t relevant to me I have heard a lot of issues coming from IR35!