Supporting guidance for supervision, direction and control questionnaire
Hargenant have developed a Compliance questionnaire, with the assistance of EY (Ernst & Young), the UK’s leading Advisory Service, which is designed to help both our contractors and agency partners determine whether or not a self-employed worker(s) whose services we are seeking to provide to an agency should, in fact be treated as employees for tax purposes due to the way in which they perform their services. This would be the case if the worker is (or could be) subject to supervision, direction or control as to the manner in which they provide their services.
If these rules apply, as the person paying the worker Hargenant is responsible for deducting PAYE/NIC and if not the appropriate evidence is gathered and recorded to support such a conclusion.
The Hargenant questionnaire should be used in conjunction with any other available information in relation to a specific engagement. Its contents should be shared with and confirmed by the agency concerned wherever possible. Not all the answers will have the same weighting and they will be dependent on the circumstances of the specific engagement. The responses recorded to the questions should assist in reaching a conclusion as to whether the worker is subject to supervision, direction or control (or the right thereof) and additionally will evidence that relevant questions have been asked and the answers documented.
The following notes are designed to assist in determining whether supervision, direction or control applies and should be read before completing the questionnaire for the first time.
1) Can the worker be told what to do (as to the manner)?
Can the engager control what the worker does? The engager could be the end client or a manager or a foreman.
It is not relevant that the client has control over the scope or quality of the work undertaken. For this test to be met, the client must have at least the right to tell the worker how to do the work (see 5 below)
2) Can the worker be moved depending on priorities?
Is the client able to move the worker around the site as they choose or is an agreed work plan drawn up at the start of the task? A worker, who is moved from task to task as the client choses, is more likely to be subject to supervision, direction or control, but a worker who occasionally agrees to vary the agreed work schedule to accommodate changes in the schedule would not be.
3) Can the worker decide when the work is done?
Is the worker tied to when the work should be done? This needs to be more than meeting a deadline. For example, it would be fine for a worker to agree to complete the task by a certain time, but a worker given instructions as to what should be done and when is likely to be subject to supervision, direction or control.
4) Is the worker skilled or an expert in the field?
Highly skilled workers who are simply “left to get on with it” are less likely to be subject to supervision, direction. Lower skilled workers requiring more instructions are conversely more likely to be supervised, directed or controlled by the engager/end client.
5) Can the worker decide how the work is done?
Can the engager (or their manager/foreman etc.) control how the worker carries out their assignment? i.e. is the engager/end client dictating the manner in which the worker carries out their duties, instructing them or overseeing what they are doing on an ongoing basis?
If the worker can generally carry out the work whichever way they want, they are unlikely to be subject to supervision, direction or control. Where, without interfering in the way the worker conducts the task, the engager is involved in the final quality control check to ensure the work meets a satisfactory standard and the contract has been completed – this does not amount to supervision, direction or control.
As well as assessing whether a worker is in practice supervised, directed or controlled on a day to day basis, you also need to determine whether there is any legal right for a person to step in and exercise supervision, direction or control over the manner in which they perform their work. This legal right might for example be contained in contractual documentation or in legislation specific to the role. Note, however, that a requirement to comply with Health and Safety legislation should not on its own be sufficient to amount to a right of supervision, direction or control.
The changes to the agency legislation introduced in April 2014 focus principally around the manner in which the worker provides their services. The worker is considered from the outset (in the legislation) to be subject to supervision, direction or control (or to the right of) unless you can evidence otherwise.
The questionnaire should therefore assist in gathering the minimum amount of information in relation to a particular engagement and based on the answers provided (and perhaps on other information held) make an informed decision reached on the facts available as to whether a worker is subject to supervision, direction or control (or the right thereof) by any person, (typically the end client) for a particular engagement.
The importance given to any of the answers provided to particular questions will be dependent on the specific engagement, but it is highly unlikely that a decision could be made on the answer provided to one or two of the questions in isolation.
Where the majority of answers provided fall in to the middle category, further facts may need to be sought or existing information reconsidered.
The contents of the questionnaire will be shared with and confirmed by the agency concerned.