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HMRC internal manual

Employment Status Manual

Guide to determining status: personal factors (effect of Lorimer on relatively long-term part-time engagements)

An individual who is carrying on a profession through a private practice or carrying on a business - and is self-employed in respect thereof - may in addition have one or more relatively small long-term but part-time engagements in a related field. The facts may show that it is reasonable to regard these as engagements in the course of that private practice or business. Following the Lorimer decision we take the view that this is a legitimate factor to take into account. Nevertheless, it will only be one factor and others will clearly need to be considered before a decision based on the overall picture can be made.

This factor is likely to have more importance in the professional field or where an individual is in business to provide only his or her own skill.

When considering the status of a part-time engagement for an individual who is otherwise in business providing only his or her own skill or is a professional having a private practice - and who regards the engagement as another engagement in the course of that business or practice- this additional factor may be taken as a strong pointer towards self-employment where

  • there is a mutual intention to create self-employment (and there is no written contract suggesting otherwise), and
  • the part time work is closely related to the practice or business (for example this additional factor may be relevant for an accountant with a full time private practice who lectures in accountancy, but would not if he lectured in music), and
  • the part time engagement is small in comparison to the private practice or business (in terms of receipts generated and time taken).It should also be remembered that a person who is in business may enter into a contract which, properly considered, is an employment - see, for example, the case of Sidey v Phillips (see

ESM7120). Other cases where the existence of a related business is a factor will need to be viewed on their own merits by reference to the picture overall. Where, for example, a self-employed lorry driver who supplies his or her own lorry takes on a regular part-time lorry driving engagement driving the engager’s lorry then the existence of the related business is unlikely to be sufficient to make the engagement one of self-employment where other factors indicate employment. When this happens the income from that employment is taxable under Schedule E/as employment income and subject to Class 1 NICs even though the other business income is assessable under Schedule D and subject to Class 2/4 NICs.