Employer’s obligations (worker’s employment status)

It is a general requirement that those wishing to take on workers consider the terms and conditions of a particular engagement to determine whether the worker is an employee or self-employed. If these requirements are not met it creates unfair competition between those businesses that meet their responsibilities and those that do not. It also creates unfairness where, for instance, two workers engaged on the same project and performing the same tasks for separate businesses are not paying the same tax and NICs due to the incorrect classification of one of them.

You can ask your local Status Inspector for an opinion as to the employment status of your workers.

Alternatively you can obtain a HMRC ‘view’ of the employment status of your workers by using the Employment Status Indicator (ESI) tool. Provided the answers given to the ESI questions accurately reflect the terms and conditions under which the services are provided at the relevant time of the contract, HMRC will be bound by the ESI outcome where the engager or their authorised representative provides copies of the printer-friendly version of the ESI Result screen, bearing the 14 digit ESI reference number, and the Enquiry Details screen. You should also retain a copy of the written contract (if available) in relation to the engagement which the print-out refers along with any other documentation you relied on when completing the ESI.

For further information contact Davenports, by simply completing the form below