»Ê¹ÚÌåÓýapp

A strong indication of self-employment can be the financial risk which the worker runs in doing the job. In general terms, the greater the financial risk the stronger the pointer towards self-employment. Individuals who risk their own money by, for example, buying assets, bearing their running costs, paying for overheads and materials are likely to be self-employed. Employees do not usually need to risk their own capital. In this context investment by the individual as a shareholder is irrelevant. It is perfectly possible for an individual to be an employee of a company and also be a shareholder of that company.

Where a worker is required to and does correct sub-standard work in the workers own time i.e. the worker does not get paid again for correcting the work, then this is a pointer towards self-employment. »Ê¹ÚÌåÓýapp pointer to self-employment will be increased where the worker must also, and does, supply replacement materials. For example if a bricklayer has to re-build a wall and supply and pay for the cost of the mortar/bricks etc this would be a stronger pointer to self-employment than if the contractor supplied the replacement materials.

Financial risk may also occur where an individual incurs significant amounts of expenditure on training to provide himself/herself with a skill which is necessary for a particular engagement. This can be treated as a pointer to self-employment if there is a real risk that the investment would not be recovered from income from future engagements.

»Ê¹ÚÌåÓýapp absence of financial risk does not always mean the worker is an employee. Nor does the absence of what would normally be regarded as a business organisation. Yet it is fair to say that workers without either are unlikely to be self-employed.

An example of an exceptional case is the session musicians who were held to be working under contracts for services. »Ê¹ÚÌåÓýappy did not have their own business structure or risk their own capital. »Ê¹ÚÌåÓýapp Court’s decision was based largely on the fact they remained essentially freelance musicians pursuing their own professions as instrumentalists with individual reputations even when playing for an orchestra. [Addison and others v »Ê¹ÚÌåÓýapp London Philharmonic Orchestra Society Limited (1981) ICR261 and Midland Sinfonia Concert Society Limited v »Ê¹ÚÌåÓýapp Secretary of State for Social Services (1981) ICR454.]