The case for a statutory employment test

Key points

• The current ‘test’ to determine employment status has evolved through case law resulting in a patchwork of precedents.
• The lack of an objective method to determine employment status under IR35 means significant uncertainty and inconsistency as each case must be considered on its own merits.
• The introduction of a statutory employment test (SET) could provide this much-needed clarity and efficiency in the tax system.
• To ensure the proposed SET is effective it must incorporate a weighting system.
• By providing a clear objective standard for determining employment status a SET would create a fairer more efficient tax system that benefits everyone.

The high-profile case of Adrian Chiles and his ongoing dispute with HMRC over his IR35 status has reignited the debate surrounding the complexities of employment status and tax obligations. IR35 is often misunderstood. All IR35 does is ensure that an employee cannot put...