For many years now the determination of whether someone engaged to provide services to a Company is actually an employee or not is a tricky area…get it wrong and the consequences could be costly.
Just because you have a ‘Contract for Services’ it does not necessarily mean that HMRC would deem the relationship to be between two businesses, they may determine that the person providing the services is actually an employee. If HMRC considers the relationship to be that of employer and employee National Insurance and Holiday pay will become due, in addition to the ‘worker’ being entitled to other rights.
HMRC have developed an interactive tool that generates questions depending on the choices you select. HMRC says that it will stand by the result given, unless a compliance check finds the information provided to be inaccurate. We recommend you enter the details of the arrangement exactly as they are intended and keep a record of the result that the check provides. Both the worker and end client can complete the check.