Whistleblower
Whistleblower
THAT CONFIDENTIAL MEMO that was accidentally left in the photocopier, the e-mail sent 'Reply all' by mistake — they all make their way to Whistleblower. Or so he says ...
COUNSEL'S OPINION
From: S.T. Nicolas, of counsel
To: Messrs Bleak, Midwinter & Co
Whistleblower
Whistleblower
THAT CONFIDENTIAL MEMO that was accidentally left in the photocopier, the e-mail sent 'Reply all' by mistake — they all make their way to Whistleblower. Or so he says ...
COUNSEL'S OPINION
From: S.T. Nicolas, of counsel
To: Messrs Bleak, Midwinter & Co
Instructing solicitors have requested a written opinion in respect of the employment status of a potential client, Father Christmas. It is understood that Father Christmas is currently appearing in a range of local department stores and shopping malls.
Myth take
There are various issues that need to be considered, the first of which is whether Father Christmas a myth. Clearly mythological characters do not exist and therefore cannot be employees. To complicate matters further, a mythological character would not be able to produce evidence of a right to work in the UK such as is needed to satisfy the Asylum and Immigration Act requirements, and would therefore not be in a position to be employed.
The real deal
Ignoring mythological characters, our next category of Santa is, of course, the real Father Christmas. The real Father Christmas — hailing from Lapland in Finland, which is one of the EU Member States — would have a right to undertake paid employment in the UK. One would expect the real Father Christmas to supply his own little helpers, which extends beyond a limited power of delegation, and he could reasonably provide a substitute (as in Hargreaves' Mr Snow) — this test being of high significance since Tanton v Express and Echo Publications. One would expect the real Father Christmas to have a number of customers across the world and he would therefore not be reliant upon one source for his income (Hall v Lorimer).
In terms of financial risk, Father Christmas's income is seasonal, but the expense of running his own operation continues throughout the year — clear financial management is therefore highly important. It's not just at Christmas that the reindeer need carrots, and whilst it is now some years since 'the expense of maintaining a horse' was dropped from TA 1988, s 198 and its successor in ITEPA 2003, there can be little doubt that the expense of running a reindeer would not be a cost that you would normally expect an employee to foot personally.
Insofar as integration is concerned, it is questionable whether Father Christmas can truly be regarded as 'part and parcel' of the organisation. His services are provided for a limited purpose and a limited duration, and the key activities of a department store, etc., would not include counselling services for children or stress relief/inducement for parents. It is fair to say that a department store would certainly survive the Christmas period without the erratic presence of a bearded gentleman in a red jumpsuit. The store is not obliged to provide a Father Christmas, or provide him with work and Father Christmas is not obliged to provide the service. In this regard, it is probably fair to conclude that the real Father Christmas would not be an employee.
If he was an employee, there may be further scope for mitigating costs. As Finland is an EU Member State, Father Christmas may hold a certificate of continuing coverage so that NIC need not be accounted for; In addition, an employee Father Christmas would not be liable to primary NIC in any event, as a brief examination of his birth certificate would identify that he was over the normal state pension age.
Father Christmas is presumably resident and ordinarily resident in Finland and would be taxed only on duties/services performed in the UK. A quick glance at the Finland/UK double tax treaty confirms that double taxation relief would be available. If the heartless status Inspector concluded that Father Christmas was an employee, then one would hope that an NT code would be awarded so that no tax would be deducted through PAYE anyway. Of more concern, no doubt, is Father Christmas's ability to conclude contracts in the UK on behalf of the Finland employer, which may create a permanent establishment in the UK (although whether the handing of a present to a child in return for good behaviour through the last year is a concluded contract is uncertain — the consideration would appear to be past). There is all the more reason to push for self employed status as the permanent establishment rules do not apply to independent agents.
'Tonight, Matthew ...'
The final possibility is that Father Christmas is not, in fact, the real Father Christmas, but is an impersonator. It may be worth considering how organisations normally treat impersonators working on the premises for a limited duration (and where they cannot be called upon to perform non-impersonator-type duties). In doing so, a likely conclusion would be that the individual was not an employee, and he was engaged for a specific limited purpose, would probably have many other sources of income, and would not generally be identified as a representative of the business to whom he was providing his service. This is, of course, overly simplistic, and one would normally look at other factors in tandem, including:
* Does he provide his own uniform?
* Does he provide his own helpers?
* Does he normally work for the same business performing other duties as an employee?
* Is he paid a fixed fee but takes responsibility for providing grotto gifts, etc.?
* Does he perform as Father Christmas for other businesses — what does his business card say?
Many might point to the well publicised case of Carmichael & Another v National Power plc and identify that the irregular nature of his engagement and the right to be 'unavailable' may suggest that he is not an employee, although a certain element of caution is required here as Carmichael only considered the status of the workers in between periods of paid employment.
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