Below is a summary of the areas which are significant in terms of employment status
1)Level of Control
One of the deciding factors on whether an individual should be employed or self-employed is the level of control they have over their own work. HMRC will consider what control is exercised over what work is done, how it is done, where it is done and when it is done?
- Is the individual given a brief for a piece of work and thenjust expected to deliver it?
- Is there a high level of supervision and line management?
- Also where and when the work can be undertakenand whether HCC specifies this.
An employee is more likely to be;
- Working very closely with HCC, being given guidance on how to complete tasks and under supervision
- Potentially working on multiple projects over an extended period of time, or one after another
- Line managing other HCC employees
2)Financial Risk
Does the person take genuine financial risk, e.g. are they required to invest in significant equipment, provide materials or do they have to put unsatisfactory work right at their own expense?
- The individual supplies their own ‘tools of the trade’?
- Is there any financial risk to them?
- They charge a fixed rate for a project or piece of work
An employee is more likely to be;
- paid an hourly or daily rate
- be reimbursed for all expenses
- Supplied with everything they need to do the job
3)Substitution (Personal service)
Is there a requirement for the personal service of the individual or is there an unrestricted right to provide and pay a substitute who would not need to be interviewed by the end client in advance?
- Can the worker arrange for someone else to do the work instead of them during the engagement?
- This may not always be possible if they are highly skilled, however it may be that the worker is called off a list of similar workers and it does not matter to the council which of a group of specialists does the work. This may be considered to show an element of substitution.
An employee is more likely to be;
- Working solely for HCC,
- If unable to complete the work for any reason, eg sickness or holiday the worker would not supply a replacement to complete the work
4)Integration
Is the person part and parcel of the organisation, e.g. do they have line management responsibilities and how do they present themselves to end users
An employee is more likely to be:
- Working within an HCC department / team
- Have access to a desk, computer, phone etc. within HCC premises
- Line managing others within an HCC team
- working at HCC exclusively for an extended period of time (i.e. over six months)
5)Mutuality of obligation
Is there an obligation to provide the person with work or for that person to undertake it?
An employee is more likely to be;
- Working on a number of tasks / projects
- Able to be moved to cover another area of work when workload is an issue
- Expected to work set hours on specified days
Each of these 5elements has some bearing on the outcome, although not all factors have to be met. Any one of the above can swing the outcome from employed to self-employed or vice-versa.