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HMRC internal manual

Employment Status Manual

Considering the evidence: what happens in practice

Of course it is not just the relevant contracts that must be considered. Account must also be taken of all the terms on which the services are provided.

Following the Judicial Review of the legislation Mr Justice Burton confirmed this principle where he stated in his judgment that


“But particularly given the fact that, at any rate at present, a contract on standard terms may or may not be imposed by an agency, or may be applicable not by reference to a particular assignment, but on an ongoing basis, and may actually bear no relationship to the (non-contractual) interface between the client and the service contractor, such documents can only form a part, albeit an important part, of the picture.”

The Special Commissioners applied this principle in the cases of Eddie Battersby v Stephen Campbell (SpC287), F S Consulting Ltd v Patrick McCaul (SpC305) and Lime-IT Ltd v CIR (SpC342). They said that in considering the terms of the notional contract it is necessary to concentrate on the substance of the contractual arrangements rather than their form - see paragraphs 51 and 54 of the F S Consulting decision - following the judgment in the case of McManus v Griffiths (1997) 70TC218.

This approach was confirmed by Mr Justice Hart in the case of Synaptek Ltd v Young [2003] EWHC 645 (Ch) at paragraphs 29 to 31 of his judgment - see ESM7260.