At the third stage of deciding employment status using the Ready Mixed Concrete test, can factors other than the express and implied terms of the contract be considered?

Yes, held the Court of Appeal in the recent case of Atholl House Productions v HMRC.

The case concerned the IR35 status of a BBC Radio Scotland presenter, Kaye Adams. A key issue was whether factors other than the express and implied terms of the contract could be used when deciding if the contract was, overall, consistent with employment, e.g. if the individual was in business on their own account; they could.

Sir David Richards noted: “The more difficult question, in my view, is not whether other factors can be taken into consideration but what limit there is on the choice of such factors. For this, there must be a return to first principles. The relationship of employment is created by the employer and employee through the contract made by them. The question for the court or tribunal is whether, judged objectively, the parties intended when reaching their agreement to create a relationship of employment. That intention is to be judged by the contract and the circumstances in which it was made…”.

In a broad review of the authorities, the court noted that it was wrong to regard the Ready Mixed Concrete line of cases and other leading status cases as representing two separate tests for employment status, such that the result of a case could depend on which test was applied. The court overturned the Upper Tribunal but remitted the case for a final decision.

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