When trying to decide the employment status of an employee as opposed to a self-employed contractor, the First-Tier Tax Tribunal held in Dhillon and Dhillon Partnership v The Commissioners for HMRC that tribunals must avoid a “checklist approach”.

Basic facts

The Dhillon Partnership, which provided haulage services to larger companies in the construction business, had a pool of drivers available for deliveries who worked as self-employed contractors. None of them had written contracts.

Generally they were telephoned the evening before a job and asked if they wanted to work the next day. If they accepted the offer, they were paid a fixed amount per shift but nothing for holidays. Drivers could refuse the offer but could only get another driver to do the job if they had exceeded the number of hours they could drive a vehicle without a break. They could work for other employers and remove themselves from the pool at any time.

Drivers had to hold an HGV licence and have an EPIC card for construction sites which required a training course which they had to pay for themselves. The company did not provide legally-required personal protective equipment but did keep spare hard hats, gloves and high visibility jackets in case the drivers forgot their own.

HMRC determination

In March 2014, HMRC issued determinations for PAYE and National Insurance contributions for the tax years 2009-10 to 2012-13 inclusive relating to drivers who worked for the partnership during that time.

After a review upholding the decision the partnership appealed to the First-Tier Tax Tribunal in June 2015.

Arguments by the parties

The partnership argued that the drivers were self-employed because:

  • They could appoint a substitute in certain circumstances
  • There was no mutuality of obligation between them in that the company did not have to offer work and the drivers did not have to accept it
  • The company did not provide any equipment to the drivers.

HMRC, however, argued that the drivers were employees because:

  • They had to carry out the work themselves
  • They were controlled by the partnership in that if something went wrong, the contracting company would look to the partnership
  • in the first instance to resolve the issue
  • The drivers worked regularly for the partnership, some of them earning up to £25,000 per year
  • There was no unfettered right of substitution
  • The overall picture was one where the drivers were integrated into the business of the partnership.

Decision of First-Tier Tax Tribunal

The most important point, according to the tribunal, was to avoid a “checklist approach”, not least because the indications of employment versus self-employment often did not “point consistently in one direction”. For instance, in this case the drivers could be said to be self-employed because they operated without supervision and had a limited right to substitute other drivers; whereas the lack of evidence that the drivers were in business on their own account, combined with quite prescriptive rules for the performance of the deliveries imposed by the partnership, pointed to employment.

It was therefore necessary to step back and look at the whole picture. Although the work engagements in this case were short term, nevertheless the relationship between the drivers and the partnership was one of “master and servant”. The drivers were essentially “day labourers” with Mr Dhillon, the managing partner, very much the boss in the relationship. Combined with the near-total absence of evidence that the drivers were running their own businesses, the tribunal decided that the drivers were employees rather than self-employed contractors.


This decision shows that, in determining whether or not a person has employee status, whilst there are various factors to consider, tribunals will look at the actual substance of the relationship. Employers who seek to deprive people of their employment rights by improperly labelling them as self-employed are at risk of receiving a large tax bill.