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HMRC internal manual

Employment Status Manual

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HM Revenue & Customs
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Case Law: Introduction - Use of Case Law in Employment Status Work

Case law assists us in interpreting the facts and coming to a conclusion as to the nature of a particular contract. Over the years the courts have laid down a number of tests, conditions or indicia which should be considered as a whole in determining employment status. However, there is neither a single test nor a magic formula for determining the nature of a contract.

It is the principle established by a court in a particular case that is important as it may set a binding precedent. Even then the courts may restrict or widen the application of a principle established in an earlier case.

One thing the courts have consistently stressed is that every case must be decided on its own particular facts. (see Walls v Sinnett 60TC150 at ESM7130and Barnett v Brabyn at ESM7170). The courts have a habit of distinguishing one case from another on the facts.

If the facts are on all fours with a decided case, then that may be a good indicator of how the courts will decide but there is no certainty there. It is recommended that you should

  • ascertain the facts
  • interpret the facts using the principles established in reported cases
  • then form an opinion on the worker’s employment status.