HMRC clarification

HMRC has clarified its view on the record keeping requirements, completion of Self Assessment Tax Returns and interpretation of 'merely incidental' duties with regard to dual contracts.

The HMRC paper clarifies HMRC’s policy in relation to dual contracts which was explained in a Tax Bulletin article published in 2005. See EIM77030 Appendix 3: Non domiciled employees: dual contract arrangements.

Questions have been raised recently with HMRC regarding two issues that arise in dual contract arrangements –

(i)what documents does HMRC expect employers and employees to retain and make available in response to enquiries into dual contracts; how does HMRC assess the relevant risks of these arrangements; how an employee should return income from dual contract employments; and

(ii)what is HMRC’s technical and policy interpretation of “merely incidental” duties?

This paper is intended to clarify HMRC’s view on these two issues. It is not intended to replace Tax Bulletin 76, which addresses other issues as well in relation to dual contract arrangements.

The paper is available from HMRC.