This Practice Note has been written by Anne Redston, Barrister. It is her personal view; she is not authorised to speak for the Tribunals Service or the judiciary.

This Practice Note sets out the main differences between employment and self-employment. It discusses the Timing of payment of income tax, National insurance contributions (NICs), expenses, statutory payments, leave entitlements and (briefly) employment rights. It does not cover those who work through agencies (for which, see Practice Notes: Onshore employment intermediaries—income tax provisions, Onshore employment intermediaries—key practical considerations and Offshore employment intermediaries—income tax provisions and key practical considerations).

From the individual’s perspective, Employment status matters, because it determines the income tax and NICs on earnings, as well as the employee’s statutory rights. From the engager’s perspective, miscategorisation may trigger PAYE and NICs assessments as well as claims for employment rights and/or statutory payments. Getting employment status wrong can be very expensive.

This Practice Note, and the other Practice Notes on employment status, are only a summary of the applicable law and do not cover all situations. In particular, the tax