Risk is key to self-employed status

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THE CHANCELLOR, Norman Lamont, has said that only those who take the risks associated with running a business should enjoy the status of being self-employed.

In a letter to Ralph Howell, Tory MP for Norfolk North, about the way people working in the film and TV industry are treated for tax purposes, he says that defining the borderline between employment and self- employment is 'a difficult area'.

'I would like to stress that the Inland Revenue are not pursuing any campaign against the self-employed. Employers and workers are free to agree whatever contractual arrangements are most convenient to them,' he writes. 'But they cannot designate a particular working relationship as 'self-employment' if the facts do not support that conclusion. Self-employed status alters the way that earnings are treated for tax and national insurance purposes and it is right that it should be enjoyed only by those who are genuinely taking the risks associated with running a business.'

Employers in film and TV followguidelines indicating which jobs should be classified as self-employed.

People whose jobs are not on the list can ask the Revenue to make an individual assessment of the work, with a view to accepting the classification.

The TV industry was in the taxation spotlight before the freelance contractual arrangements of John Birt, the BBC's Director-General, were revealed by the Independent on Sunday. The case of Ian Lorimer, a vision mixer who argued he should be accorded self-employed status, reached the High Court and it ruled in his favour. The Revenue has filed a protective notice of appeal to retain the option to take the case on to the House of Lords.