Contract lawyer (UK) Roger Sinclair Egos Ltd

(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.

(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master.

(iii) The other provisions of the contract are consistent with its being a contract of service.' ^{^[1]}

Thus case law suggests that there are three preconditions, all of which must be satisfied, before one can move on to consider the 'factors' extracted by the Revenue -

· personal service; and

· submission to a sufficient degree of control; and

· nothing else inconsistent with an employment relationship.

- and that if even one of those preconditions is not satisfied, then the relationship cannot as a matter of law be employment - however the other factors may point. The 'irreducible minimum'.

Painting the picture

Case law also makes clear that (it would appear, in the absence of inherent inconsistency):

"In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person's work activity.

This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation.

The object of the exercise is to paint a picture from the accumulation of detail.

The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole.

It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation.

The details may also vary in importance from one situation to another.' [2]

‘the fundamental test to be applied is this: “is the person who has engaged himself to perform these services performing them as a person in business on his own account?”’ [3]

If you're another lawyer or an accountant reading these pages, I'd be happy to discuss any points arising with you - particularly if you'd like to debate any points where you disagree with my views - mail me!

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[1] Ready Mixed Concrete South East Limited v Minister of Pensions and National Insurance 1968 QB

[2] Hall v Lorimer 1994 IRLR 171

[3] Market Investigations Ltd v Minister of Social Security 1969, approved by Privy Council in Lee Ting Sang v Chung Chi-Keung 1990)

Overall picture

Irreducible minimum

Case law makes clear that