Dáil Éireann Debate, Tuesday - 17 June 2014
195. Deputy Regina Doherty asked the Minister for Finance the way the Revenue Commissioners determine the status of an employee versus a sole trader working on contract in an agency licensed by the aviation authority; and if he will make a statement on the matter. [26055/14]
View answerI am informed by the Revenue Commissioners that there is no statutory definition of employment or self-employment and that the question of whether an individual is engaged under either
1. a contract of service (i.e. an employee), or
2. a contract for services (i.e. self-employed/sole trader)
is a question of fact and of general law. Case law shows that there is no one formula under which a contract of service or a contract for services between parties can be identified. Regardless of how the parties may describe themselves, all the possible factors (including written, oral and implied details) that bear on the relationship between the parties must be examined, given their proper weight and a judgement made on their overall effect.
In order to provide some clarity as to whether an individual is employed or self-employed, the Employment Status Group (set up under the Programme for Prosperity and Fairness 2003-2005) published a Code of Practice for determining Employment or Self-employment status of Individuals. The Code of Practice was updated in 2007 by the Hidden Economy Monitoring Group under the Towards 2016 Social Partnership Agreement. Revenue practice in terms of considering the status of an individual for tax purposes i.e. the question of whether an individual is an employee or a sole trader, is to apply the criteria set out in the Code of Practice to the facts and circumstances of each case. This is the practice regardless of who the individual is engaged by.
Where Revenue believes that individuals engaged by a taxpayer are employees but the taxpayer has not operated PAYE because the taxpayer takes the view that the individuals are self-employed, Revenue will raise a PAYE estimate on the taxpayer. It will be open to the taxpayer to appeal the estimate to the Tax Appeal Commissioners.
