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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Considering the evidence: multiple engagements

It can be difficult to decide whether a worker would be considered to be carrying on a business on his own account where that person has, through his intermediary, had a succession of short-term engagements, or indeed has had simultaneous engagements, with different engagers.

In his judgment on the Judicial Review of the legislation, Mr Justice Burton said that

“The legislation requires consideration on an engagement by engagement basis.”He qualified this conclusion by adding:

“Notwithstanding this however, the question of whether the service contractor himself has, prior to that engagement, performed or is, simultaneously with that engagement, performing…or will subsequently, after the termination of that engagement, perform, services for others, and is to be construed as carrying on business in his own account, is and must be a central consideration.”However, he then added

“Of course, whether such a pointer is determinative may depend upon the nature of a particular assignment. She may be self-employed for much of the year, and yet, in relation to a particular assignment, perhaps by virtue of its length or its specific arrangements, she may be considered as an employee for the purposes of IR35.See paragraph 48(ii) of Mr Justice Burton’s judgment.

It is therefore necessary to consider the earlier history of engagements when considering whether a particular engagement falls within or outside the legislation. This follows from the approach adopted in the Hall v Lorimer case. But in that case the most outstanding feature, according to Lord Justice Nolan was that “Mr Lorimer customarily worked for 20 or more production companies and that the vast majority of his assignments, as appears from the annexures to the stated case lasted only for a single day.”

Consequently, where for example there is a series of short-term engagements for many different clients and the worker is a skilled or professional person that is more likely to lead to the conclusion that a particular engagement is outside the legislation. But the longer the duration of a particular engagement, the more likely it could be considered in isolation. In any event the specific arrangements relating to an engagement may be sufficient to bring it within the legislation.

Furthermore, in the Lorimer case, it was a fact that Mr Lorimer “incurred very substantial expenditure in the course of obtaining and organising his engagements and as an incident of carrying them out”. Where a worker provides services through a recruitment agency, it will be less likely that he will incur substantial expenditure in obtaining and organising his engagements and therefore less likely that he would be considered to be in business on his own account.

It is not therefore possible to specify a cut-off point in terms of duration of engagements below which an engagement would be considered to be outside the legislation. And neither is it possible to say that engagements beyond a certain duration are within the legislation. It is necessary to take account of the wider picture in every case but also of the facts relating to the specific engagement under review.