Is it correct to treat contractors as self-employed or should they be on the payroll?

There are a number of factors that may indicate that a contract between a contractor and a worker may be a contract of employment, including:

  • mutuality of obligation and personal service (employer provides work which employee performs),
  • control,
  • whether a substitute worker can be provided, and other terms such as who provides any equipment or materials required,
  • the worker’s degree of financial risk and opportunity for profit,
  • whether the worker is ‘part and parcel’ of the organisation,
  • the number of other similar engagements entered into by the worker, and
  • the intentions of the parties

HMRC have an online tool, Check Employment Status for Tax, that should be used by the charity to indicate the status of a worker.

Want to discuss further?

Helen Elliott

Partner

Ross Palmer

Senior Tax Manager

Gillian McKay

Senior Tax Manager

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