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Chapter ESM0541

Document Cited authorities 2 Cited in Related
Vincent
Published date07 March 2016
Record NumberESM0541
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

A strong indication of self-employment can be the financial risk which the worker runs in doing the job. In general terms, the greater the financial risk the stronger the pointer towards self-employment. Individuals who risk their own money by, for example, buying assets, bearing their running costs, paying for overheads and materials are likely to be self-employed. Employees do not usually need to risk their own capital. In this context investment by the individual as a shareholder is irrelevant. It is perfectly possible for an individual to be an employee of a company and also be a shareholder of that company.

Where a worker is required to and does correct sub-standard work in the workers own time i.e. the worker does not get paid again for correcting the work, then this is a pointer towards self-employment. The pointer to self-employment will be increased where the worker must also, and does, supply replacement materials. For example if a bricklayer has to re-build a wall and supply and pay for the cost of the mortar/bricks etc this would be a stronger pointer to self-employment than if the contractor supplied the replacement materials.

Financial risk may also occur where an individual incurs significant amounts of expenditure on training to provide himself/herself with a skill which is necessary for a...

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