ESM0119 - Procedural aspects of status cases: formal procedure in disputed cases - general

If the engager or the worker does not accept your opinion, you have exhausted all lines of argument and to continue with further correspondence would mean repeating yourself, then you need to consider taking steps to resolve the matter formally.

The first step is to create a tax charge and/or make a NICs decision against which the engager/worker can appeal. The Status Inspector should decide what should be done and this will depend on the circumstances of the individual case but there are the following options to consider.

• Regulation 80 determination on engager (having first considered whether the engager has a good case for consideration by the DMB PAYE Errors Unit under Regulation 72 (Condition A) – see ESM0120)
• The appropriate tax assessment on worker (pre-SA (self assessment) year)
• Amendment to worker’s SA returns (following Section 9A enquiry).
• NICs decision on engager/worker.

The following guidance tells the Status Inspector what to do in SA cases where formal action is required.

Engager and worker contend worker self-employed but HMRC disagrees

The Status Inspector should

• make a Section 8 NICs decision, and
• make a Regulation 80 determination (but see ESM0120), and
• make an amendment to a self assessment (following a Section 9A enquiry). In new cases this may not of course be possible.

Engager contends worker self-employed but worker contends employment

The Status Inspector should

• make a Section 8 NICs decision, and
• make an amendment to a self assessment (following a Section 9A enquiry). In new cases this may not of course be possible.

ii) HMRC considers worker employed

The Status Inspector should

• make a Section 8 NICs decision, and
• make a Regulation 80 determination (but see ESM0120).

Engager and HMRC contend worker employed but worker contends self-employment

The Status Inspector should

• make a Section 8 NICs decision, and
• make an amendment to a self assessment (following a Section 9A enquiry). In new cases this may not of course be possible.

Where possible, arrangements should be made for any appeals against these to be heard by the Commissioners at a joint hearing (see IM4925).

Failure to do this could result in different bodies of Commissioners coming to a different decision on status - either reducing the charges to nil (with no charge on either party) or leading to double charges.

For further information about NICs decisions see the online Decisions and Appeals Guidance (DAG).

If in doubt on the appeals position, seek advice from Central Policy (TAA - Advice on Appeals).