ESM1002 - Detailed guide to determining status: the approach to be adopted

The general approach to determining status is summarised at ESM0501 to ESM0505. It should however be remembered that an office holder, for example a company director, is automatically chargeable under Schedule E/Part 2 ITEPA 2003 and liable for Class 1 NICs on the emoluments/earnings from the office – see ESM2500 onwards for more information on ‘offices’.

In order to establish whether a worker, who is not an office holder, is an employee or self-employed, it is firstly necessary to establish the terms and conditions of the engagement. This will normally be established from the contract between the worker and the engager. For further detailed guidance, see ESM1003 onwards.

Having established the terms and conditions it is then necessary to consider any surrounding facts that may be relevant.

These facts then need to be considered in the light of the different factors that the courts have identified as being relevant in determining whether a particular contract is a contract of service (employment) or a contract for services (self-employment) - see ESM1012 onwards.

Your opinion on status should not be influenced by consideration of the worker’s rights, obligations and entitlement to benefits, which may arise as a consequence.