I am advised by Revenue that there is no statutory definition of employment or self-employment in tax law. In general, an individual is an employee if he or she is directed by a person on how, when and where to work, has set working hours, has no personal financial risk relating to the work, receives a fixed wage, supplies labour only and cannot subcontract the work.
Some years ago, the Employment Status Group published a Code of Practice for determining Employment or Self-employment status of Individuals. This Group included representatives from the Department of Finance, the Department of Employment Affairs and Social Protection and the Office of the Revenue Commissioners, amongst other public and private bodies. The Code of Practice is for guidance only and the employment status of an individual in relation to an engagement may in some instances fall to be determined by the Courts.
The question of whether an individual is engaged under a contract of service (an employee) or a contract for service (self-employed/partner) is a question of fact and general law. To make a determination on employment or self-employment status the full terms of the contract and the circumstances in which it was made must be established.
In the case of share fishermen and women, the High Court has determined on a number of occasions that share fishermen and women were not employees but had a relationship with the boat owner or skipper in the nature of a partnership. There are complex issues around the nature of this relationship, including the application of partnership law and capital allowances. Revenue has published a Tax and Duty Manual (TDM 04-01-11) which outlines some of the issues that may arise. This is available at the link: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-01-11.pdf.
Under Part 41A of the Taxes Consolidation Act 1997, a chargeable person (self-employed taxpayer) is required to submit a tax return to Revenue by 31 October in the year following the tax year to which the return relates (or by mid-November, if paying and filing through ROS) and to pay any balance of the liability (net of preliminary tax paid) in respect of income tax, USC and PRSI for the year to the Collector-General at the same time. In effect, a self-employed individual discharges the combined income tax, USC and PRSI liability through the self-assessment system.
Where an individual is an employee, his or her salary or wages is chargeable to income tax under Schedule E and is subject to deductions under the PAYE system by his or her employer. Emoluments is the term used to describe any remuneration assessable to tax under Schedule E. Part 42 Chapter 4 TCA 1997 imposes a legal obligation on employers to make deductions at source under the PAYE system from the payment of emoluments to an employee. The employer is obliged to pay a PRSI contribution for employees under the PAYE system. This employer contribution is paid for employees whose employment is insurable under the Social Welfare Acts.