Ch D  STC 3030;  EWHC 2113 (Ch)
An individual provided services via a personal service company, to the Automobile Association (AA), via an agency that had an agreement to supply the AA with temporary staff. He provided his services almost entirely to the AA. HMRC took the view that, had the arrangement been directly between the AA and the service company (i.e. without the involvement of the agency) then IR35 would have applied and the payments received by the company subject to PAYE accordingly. The Commissioner observed that B 'worked fairly regular hours during each engagement, … worked on parts of a project which were allocated to him as part of the AA's teams, … was integrated into the AA's business, … and had a role similar to that of a professional employee'. The Ch D upheld this decision
It was held that, on the evidence provided, that 'the nature and degree of the control by the AA under the hypothetical contract' pointed towards employment.
Comment – There have historically been several badges of trade which need to be evaluated in each case in deciding whether an individual is employed or self-employed, as follows:
Each of the above factors needs to be considered and each case would need to be decided on the balance of factors.
In the Dragonfly case, the importance of being able to send in a substitute to do the work and the amount of control that the “customer” was able to exercise were highlighted.
HMRC have an Electronic Status Indicator (ESI) to establish whether, on the balance of the facts, an individual should be treated as employed or self-employed. Subject to certain conditions, you can rely on the ESI outcome as evidence of a worker’s status for tax/NICs/VAT purposes.