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R Ashton (TC5456)
Was the taxpayer a self-employed partner or an employee?
The proprietor of Karate World set up the business as a partnership with several employees as partners of whom the taxpayer was one. From 2003 the partnership submitted partnership returns showing the taxpayer as a partner and he submitted self-assessment returns as a partner and claimed overlap relief. He did not complete the employment pages.
After an enquiry HMRC amended his 2010-11 return because the profit share declared in it did not match that in the partnership return.
The taxpayer appealed saying he was an employee rather than a partner. He had not entered into a partnership agreement and was paid a wage and bonus according to the performance of the business.
The First-tier Tribunal accepted the taxpayer’s claim. There was ‘substantial control’ over when and how the taxpayer worked. The business provided the general equipment for...
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