Taxation Law Essay Example | Topics and Well Written Essays - 2000 words

Taxation Law - Essay Example It is important to note that perpetual form of employment has some elements of a contractual type. This is because both parties have to agree on work done, how it is to be done, remuneration among other things. There are several factors that should be deeply looked at when determining whether one is an employee or is self-employed. Top among those factors is the Terms of Employment. It is important to analyse the substance of a contract rather than only look at its wording. In Ferguson v Dawson1 the judge found that workers would be self-employed only and would thus avoid deduction of income tax and insurance from their salaries. Plaintiff worked on the defendant’s building site. He argued that he was an employee when he suffered an injury and could recover damages for breach of statutory duties. The judge held that the actual nature of their relationship was that of an employer/employee and plaintiff could recover damages. It is essential that courts exercise their power in a keen way. This ensures that they cannot be abused when the plaintiff wishes to be compensated whilst he had readily chosen to be employed as an independent contractor in order to avoid tax. Sebastian is under no legal or contractual obligation to accept any of the projects offered and, therefore, no contract exists between him and Giga Systems Limited. Control is also a factor that should be considered in trying to make out the existence of the employer/employee relationship. In a typical master/servant relationship, the master has total control over the actions of his servant. Bramwell LJ in Yewenes v Noakes2 stated: The control can be seen in employment relationships where the employer exercises total control over the actions of his employee. It, therefore, emerges that such a relationship exists where an employer tells his employee what to do and how to do it. While the test may still be in use, it appears to be outdated. This is due to the simple reason that