Determining Status

How to determine whether someone is employed or self-employed

Use of a particular “label” e.g. “freelancer” or “sole trader”, does not determine that a worker is self-employed rather than employed. The legal status is instead determined by the reality of the relationship with the worker’s client.

There will be many cases where it will not be easy to decide whether a worker is an employee or self-employed. The essential question to decide is whether, in carrying out work for a person / organisation, the worker is carrying on a business. Ultimately it is for a court or tribunal to decide.

We have set out in the Guidance Note: Employment, Self-employment, and IR35 a list of various indicators of (a) employment as opposed to self-employment; and (b) self-employment as opposed to employment, which we suggest you consider.