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Davies v Braithwaite was resurrected in Hall v Lorimer.55 Here the Court of Appeal held that while the distinction between a contract of service and one for services was critical, this did not, of itself, determine whether the particular contract should be classified as one or the other. In deciding upon that classification the court may look at whether the taxpayer is in business and so see how the contract fits in with the taxpayer’s overall activities. Therefore, a vision mixer who worked for 80 days over a four-year period, all on one-or two-day contracts, was held to be taxable under schedule D, rather than schedule E, Nolan LJ citing both Davies v Braithwaite and Fall v Hitchen. Meanwhile, it should be noted the decision in Fall v Hitchen (where the one contract in issue was for rehearsal time plus 22 weeks) is consistent with Hall v Lorimer. It is still too early to tell what the House of Lords may do—the approach of the Court of Appeal does not sit easily with that of the House of Lords in IRC v Brander and Cruickshank and Mitchell and Edon v Ross (see below). |
There is no infallible criterion56 and there are many borderline cases. Aspects to be considered now are whether those involved provide their own equipment or hire their own helpers, what degree of financial risk they run, what degree of responsibility they have and how far they can profit from sound management.57 The Revenue find the task as difficult as anyone else,58 as was shown by the evidence in the unsuccessful challenge to personal service company legislation on EC and human rights law grounds in R (on application of Professional Contractors Group Ltd) v IRC commenting on the current law on the boundary between employment and self-employment and the role of the Revenue in administering this legislation.59 |