Customs Determine Employment Status

The HM Revenue and Customs has recently launched a computer-based interactive service in an attempt to aid employers and workers to determine their employment status.

The online form has been established by the HMRC (together with a new helpline - 0845 366 7899) to help employers in advance of the new Construction Industry Scheme, which is scheduled to come into effect in April 2007. Although the form is not legally binding, it does provide the employer with a useful guide to ascertain the worker’s status.

From completing the form, the basis of a subcontractor employment relationship appears to stem from the need to have a contractual provision allowing the subcontractor to provide a "substitute"; a requirement to have this provision carried out in practice; and finally the need for the subcontract worker rather than the employer to have actually paid the "substitute" for the work undertaken. The online form can be found at: www.hmrc.gov.uk/employment-status?