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Employment Status – Guidelines from ACAS and Tool from HMRC

9 May
by Suzie Business Owner & Senior HRBP

With the changing nature of work, employment status is not as clearly defined as it was in the past
when more traditional working arrangements were dominant.

There have been quite a few tribunal cases in recent months that investigated the employment
status of claimants. From these cases, it was evident that employment status can be influenced by a
number of different factors and it isn’t always clearly defined in the existing contract between

It is not only important to correctly determine someone’s employment status to understand their
employment rights and obligations and the employer’s responsibilities in these terms, but also to
ensure that tax and other contributions are paid correctly.

On the legal stand point ACAS has provided some much-needed guidance on employment status.

With regards to determining someone’s employment status for taxation purposes, HMRC has
developed a new tool that can help bring some clarity to this question for individuals.

After answering a number of questions (some of them quite complex) individuals are presented with
the result of their employment status for tax purposes. Please note that this tool does not provide
any advice on employment status from a legal standpoint.

These tools may not provide a full answer to all the questions around employment status, but they
are good starting points for having a clearer understanding.

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