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Employment status guidance

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HMRC has published updated guidance to replace sections ESM2034-ESM2069 of the Employment Status Manual, covering the tests for determining whether workers provided through agencies are employed or self-employed. See The amendments provide more detail on key elements of the agency legislation: ‘personally providing services’; and ‘supervision, direction or control’ (SDC), which is also relevant to the new rules on employment intermediaries’ travel and subsistence expenses.

The new guidance includes:

·       an example to illustrate that personally providing services does not mean that the client has a right to expect services from a particular named worker;

·       an explanation and examples to demonstrate how the conditions apply where more than one client, or more than one intermediary, is involved;

·       HMRC’s view that the employment status indicators are not relevant to the SDC test; and

·       confirmation that only one part of the SDC test must be met, so that if, for example, a worker is subject to supervision by any person but not to direction or control, the test is met.

In addition, HMRC contends that agency workers in industries that are regulated by statutory bodies will be subject to SDC, because somebody will have the right to check that their work complies with relevant regulatory standards. This includes health care workers, such as doctors and nurses, social care workers, such as social workers and social work assistants, and teachers and teaching assistants.

Issue: 1304
Categories: News , Employment taxes