Appeal Court tax victory for the self-employed: Vivien Goldsmith reports on a defeat for the Inland Revenue

Anyone who has been forced to change his or her status from self-employed to employee could have grounds for reopening an argument with the Inland Revenue after it lost a case in the Appeal Court yesterday.

The Revenue was appealing against a High Court decision that allowed Ian Lorimer, a 36- year-old TV vision mixer, to retain his status as a self-employed person.

Mr Lorimer said: 'I am terribly relieved. There are so many ways you can be in business. If you have equipment and employ other people there is no problem, - you can be classed as self-employed.

'But this case shows that you can still be self-employed if you use other people's equipment and work alone just selling your skills. I have 20 or 30 different clients a year.'

Yesterday he was working on Have I Got News for You. But he has also worked on the chess championships at the Savoy, racing and football for Channel 4, Sky football, the new shopping channel and Spitting Image. In February he goes to Norway for the Winter Olympics for CBS.

He went freelance in 1985 and works for an ever-changing array of programmes. The directors he works for are also revolving around different programmes. But directors, unlike vision mixers, are not on the Revenue's list of workers in television that it wants to see classed as employees, paying Schedule E rather than the self-employed Schedule D, which allows an array of expenses to be offset against tax.

Jeff Gitter, a partner in Lubbock Fine, Mr Lorimer's accountants, said: 'This could affect oil rig workers and lorry drivers as well as people in TV.' The Court of Appeal refused leave to appeal, but the Revenue still has a month in which to ask the House of Lords directly for leave to appeal.

Paul Hale, Mr Lorimer's solicitor and a partner in Simmons & Simmons, said: 'If you put Mr Lorimer under a microscope he was in a bad position. But if you step back, he had a business, he had an office with equipment like an answerphone and a pager, and he watched cassettes at home to prepare for his work.'

The outcome, Mr Hale says, is that freelances who can show that they have a business can be taxed as self-employed.

'The law is right,' he adds. 'It has not been changed by this case, but the Revenue was applying it wrongly.'

Employed or self-employed?

IF YOU can answer 'yes' to these questions you are probably employed.

Do you yourself have to do the work rather than hire someone else to do it ?

Can someone tell you at any time what to do or when and how to do it?

Are you paid by the hour, week or month? Can you get overtime pay?

Do you work set hours, or a given number of hours a week or month?

Do you work at the premises of the person you work for, or at a place or places he or she decides?

IF YOU can answer 'yes' to the following questions, it will usually mean you are self-employed.

Do you have the final say in how the business is run?

Do you risk your own money in the business?

Are you responsible for meeting the losses as well as for taking the profits?

Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?

Taken from Inland Revenue guideline IR56.

(Photograph omitted)