Summary
An individual was an employee of a business and not a self-employed partner for income tax purposes.
Background
The sole proprietor (T) of a martial arts instruction business that had operated for some years prior to 2003 decided to set up a partnership with a number of his predecessor business’s employees as partners, including the appellant. From 2003 onwards, partnership returns were submitted to HM Revenue and Customs (HMRC), on which the appellant was shown as a partner.
The appellant did not receive partnership accounts or a copy of the partnership agreement; nor did he take part in any partnership meetings. The appellant was paid a basic amount each month, and received a bonus amount for each month in which the karate school he taught at achieved a particular turnover figure. He was expected to meet business expenses on his own account, other
