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HMRC internal manual

Employment Status Manual

Introduction: determining whether an individual is an employee or self-employed

Whether an individual is employed or self-employed will depend upon the nature of the relationship with the person for whom the services are provided. Usually it will be easy to decide whether someone is an employee or self-employed. However, there will be many cases where it will not be so easy to decide. Where two individuals are engaged to carry out similar work, it is possible for one to be self- employed and the other to be an employee because they have been taken on under contracts with different terms and conditions.

Office’ and ‘employment’ are not defined in the legislation and the principles which determine whether an individual is an office holder or employee are derived from case law. In order to decide whether someone is employed or self-employed you have to obtain all of the relevant facts relating to the engagement and then interpret those facts in the light of this case law. This manual aims to provide you with the necessary guidance to do so.

For further guidance about offices see ESM2500 onwards.

For further guidance on how to determine whether an individual is employed orself-employed see ESM0500 onwards.