In the vast majority of cases it will be clear whether the person in question will be deemed to be an employee or self-employed/engaged in business. However, there are borderline cases in which a number of factors are relevant when considering whether the person in question is an employee or self-employed/engaged in business. When drawing the line in relation to employment relationships, the following factors, among others, will point in the direction of self-employment/ business activity:
- The person in question owns/leases operating equipment to the extent normal in the industry concerned.
- The person performing the work has full disposal of the operating equipment and carries full responsibility and financial risk for it.
- The person in question carries the risk of lack of assignments and is not entitled to a minimum remuneration etc.
- The financial settlement is not based on an hourly wage, but is based on the result – e.g. a fixed price, commission or profit from sales.
- The assignment is specified separately, and not just delimited to periods of time.
- Responsibility exists for the result of the work, e.g. responsibility for delays, defects and negligence.
- The person performing the work has own employees or is entitled to use a stand-in/deputy.
- The person in question actually has several different clients at one time or successively, or this is permitted.
- A high degree of independence in performance of the work, which means that the less professional and administrative instructions the client is entitled to exercise, the more business activity/self-employment is indicated.
- The person performing the work has his or her own place of operations where this is natural.
- The person performing the work provides the materials.
The factors must be seen in conjunction with each other and the decision will depend on an overall assessment. How the parties themselves characterise the relationship is not binding on the tax and VAT authorities. It is the actual relationship between the parties that is decisive.