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HMRC internal manual

Employment Status Manual



The Employment Status Manual is intended to provide guidance on issues relating to the employment status of individuals. The manual is divided into a number of broad subject areas as follows


ESM0002CO onwards An introduction to employment status work
ESM0100 onwards Procedural aspects of employment status work
ESM0500 onwards Guidance on dealing with employment status issues

Guidance is also provided on specific areas as follows:


ESM2000 onwards Agency and Temporary workers
ESM2500 onwards Offices
ESM2600 onwards Contracts of training and apprenticeship
ESM3000 onwards Service companies and other intermediaries
ESM3500 onwards Managed Service Companies (MSC)
ESM4000 onwards Particular occupations
ESM5000 onwards NMW and VAT
ESM7000 onwards Case law summaries


ESMX0 Conversion tables

Except where specified, you should assume when reading this manual that the guidance applies to both NICs and tax issues. The NICs legislation in Northern Ireland is similar to that which applies in the rest of the UK and, for ease of reference, only the latter legislation is used in headings in this section. In headings, Social Security (Categorisation of Earners) Regulations 1978 has been shortened to SS (Categorisation of Earners) Regulations 1978. 

Income Tax (Earnings and Pensions) Act 2003 [ITEPA]

ITEPA replaces, with minor changes, certain enactments, principally ICTA 1988, relating to income tax on employment income, pension income and social security income. Although the new Act preserves the outcomes of the earlier legislation, there are major changes to the language. For example, the term ‘“Schedule E” has disappeared and “emoluments” has been replaced by “earnings”. The context in which the term “Schedule E” was used determines the words replacing it and therefore it is not simply a matter of replacing it with another term. For example, in this manual “chargeable under Schedule E” becomes “chargeable as employment income” whilst “within Schedule E” might change to “in receipt of earnings”.

Rather than draft a new manual, it was decided to retain references to the sections of the earlier legislation and to add the sections of ITEPA. Also the new terms have been added to the old ones. For example “chargeable under Schedule E/as employment income”.

In addition references to sections of the Schedule E (SE) manual and the corresponding sections of the new Employment Income Manual (EIM) have been included.