New Revenue Guidelines for Determining Employment Status

Revenue have recently published its “Guidelines for Determining Employment Status for Taxation Purposes” (the “Guidelines”), to reflect the Supreme Court decision in The Revenue Commissioners v. Karshan (Midlands) Ltd t/a Dominio’s Pizza (the “Karshan Decision”).

The Guidelines reflects the five-step framework to be followed in determining an individual’s employment status, as established by the Supreme Court in the Karshan Decision. The five-step framework is –

1. Does the contract involve the exchange of a wage or other remuneration for the work provided? Referred to in the Guidelines as “Work/Wage bargain”

2. If so, is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party, to the employer? Referred to in the Guidelines as “Personal Service”

3. If so, does the employer exercise sufficient control over the putative employee to render the agreement one that is capable of being an employment agreement? Referred to in the Guidelines as “Control”.

4. If these three requirements are met, the decision maker must then determine whether the terms of the contract between employer and worker interpreted in the light of the admissible factual matrix, and having regard to the working arrangements between the parties as disclosed by evidence, are consistent with a contract of employment, or with some other form of contract, in particular, to whether the arrangements point to the Putative employee working for themselves or for the putative employer. Referred to in the Guidelines as “All the circumstances of the employment”.

5. Finally, it should be determined whether there is anything in the particular circumstances legislative regime under consideration that requires the court to adjust or supplement any of the foregoing. Referred to in the Guidelines as “The Legislative Context”.

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