ESM11145 | Check Employment Status For Tax: Worker’s contracts - Exclusive services

CEST asks: ‘Does this contract stop the worker from doing similar work for other organisations?’ or ‘Does this contract stop you from doing similar work for other clients?’

See ESM0555 for further guidance.

This question asks whether the worker is subject to a restraint of trade clause. Restricting the worker’s right to work suggests that the worker is not engaged in an independent business.

If the contract in any way prevents or restricts a worker from doing similar work for other hirers, then this falls within the ‘Yes’ category for CEST.

If a worker is free to work anywhere else – including for competitors, without any contractual restrictions – then this would fall within the ‘No’ category for CEST.

EXAMPLE

Sanjit works for a radio show presenting a news programme. Sanjit is approached by another radio programme to present a news discussion show.

• If Sanjit is not able to accept this offer because the contract states he cannot work for others doing similar work, then the contract stops him working for others.

• If Sanjit is able to consider taking on this work because the contract doesn’t say he can’t, the contract will not prevent him from working for others.

CEST asks: ‘Is the worker required to ask permission to work for other organisations?’ or ‘Are you required to ask permission to work for other clients?’

If a worker needs to get permission from the hirer to accept work for others, even if the contractual terms allow work for others, then this falls within the ‘Yes’ category for CEST. This acceptance can be for any reason, if the hirer has any say on working for others ‘Yes’ must be chosen.

If a worker can accept other work without having to seek the permission of the hirer for any reason, then this falls within the ‘No’ category for CEST.

EXAMPLE

Sanjit works for a radio show presenting a news show. Sanjit is approached by another radio programme to present a news discussion show. The contract does not directly stop Sanjit from accepting this work.

• If the hirer needs to agree that Sanjit can contractually do other work – taking into account that the new show may be with a competitor – then Sanjit will have to ask for permission. Similarly, if the hirer is able to impose consequences, such as termination of the contract if the work is accepted, then Sanjit will have to get permission before agreeing to present the new show

• If Sanjit can accept the work and the hirer has no say in the matter, then Sanjit is not required to ask for permission.