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All the installments of Determining Employment Status are here:

Determining Employment Status Part 1 "The Right of Control"
Determining Employment Status Part 2 "Financial Risk and Reward"
Determining Employment Status Part 3 "Mutuality of Obligation"
Determining Employment Status Part 4 "Substitution"

Mutuality of Obligation

A man named John Donne is attributed with saying "No man is an island", and mutuality of obligation is all about proving him wrong (strictly in an employment sense).

As a self employed person you need to be seen by the powers that be to be independent, and as an extension of that your own boss. No external source should be responsible for finding you work, by being self employed you take that on as part of your responsibilities.

This is not to say that you cannot accept work that is offered to you by chance, it's just that it is nobody else's responsibility except yours to find that work. On the same theme you must be free to refuse any work that is offered, and that refusal should not impact your relationship with the person or company that offered it. However, they should be under no obligation to provide you with more work in the future (although hopefully quality would have spoken for itself and they will call on you again).

If you are a self employed contractor, once the agreed work is finished to the specifications laid down in the contract you negotiated, you are free to leave without giving notice which is your right, and will help to support your argument for independence.

As you can see, independence appears as a common theme, and it is important to note that it is the appearance of independence that is the key factor over and over again. Just because you have the supposed right to do something, if you never exercise that right it can be difficult to prove. This may seem unfair, but these are the rules HMRC have laid down and we have to abide by them.

Next week we will round off the series with the Right of Subsitution often seen as the main indicator of self employment. In the meantime, have a great week, and I'll try to have something interesting for you on Wednesday.

Hugo
28/11/2008