Revenue has published new guidance outlining the tax implications of a recent Supreme Court judgment on determining employment status for tax purposes.

In the Karshan case, the Supreme Court upheld a Revenue appeal, and found that drivers working for Karshan (Midlands) Ltd, trading as Domino’s Pizza, were employees, rather than independent contractors, for taxation purposes.

Revenue’s Tax and Duty Manual sets out a five-step decision-making framework that businesses must use to determine whether a worker is an employee or self-employed for taxation purposes.

‘Review arrangements’ call

The tax authority says that the manual also includes practical examples that will help firms to determine what the Supreme Court decision means for the taxation of their workers.

Last month, Revenue chair Niall Cody (pictured) encouraged businesses that engaged workers on a self-employed basis, and their agents, to review the arrangements that they had in place.

Welcoming what he described as the “important” judgment delivered by the Supreme Court, he also signalled that there would be “an increased focus” on compliance in this area.

Revenue has reminded businesses that they are responsible for ensuring that the correct taxes are deducted from their employees’ pay and reported through the PAYE system.