When an individual works exclusively for one client, there is a presumption that he is an employee, as it usual for a self employed person to work for more than one person. HMRC do not see this as important; there view seems to be that most employees are not restricted to working for one employer. Contractors must have the right, however, to take on additional clients on a concurrent basis.
In Tax Bulletin 28, HMRC do concede that ‘long periods working for one client may be typical of employment, but are not conclusive’. The article then goes on to say that ‘regularly working for the same client may indicate that there is a single and continuing contract of employment [Nethermore (St Neots) Ltd v Gardiner (1984)]’. See also Mutuality of Obligation.
If a contract explicitly states that the supplier is not able to supply their services to other clients is likely to fail assessment. It is acceptable, however, for clauses to be included that prevent the contractor from working with the clients direct competitors, or if any other conflict of interests is created.
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