The determination of an individual’s employment status is not always straightforward and there is no single definition; Employment Tribunals and HMRC may consider different factors in deciding the issue. This means, perversely, that a person may be an employee in employment law but have a different status for tax purposes.

There are three main types of working individuals.

  1. Employee (works under a contract of employment) — including employee shareholders.

  2. Worker (usually works on a part-time basis or as an agency temporary).

  3. Self-employed and independent contractor.

This topic examines each of these in turn, including the tests from common law and HMRC to determine employment status. It also considers the atypical types of contract that have grown in recent years, notably part-time and fixed-term contracts, zero-hours contracts, apprentices, and those individuals employed by employment agencies and businesses.

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