Reference no: EM133144263

Question - Chris Lewis is a Fashion designer who started working for Delicate-Designs Ltd on 6 April 2021.

The following information is available in respect of the year ended 5 April 2022:

Chris received an income of £60,000 from Delicate-Designs Ltd. He is paid a fixed fee for each contract that he works on, and each contract lasts an average of two weeks.

Chris is under no obligation to accept any of the contracts offered; he carries out the work under his own control. He is obliged to do the work personally.

Chris works from home and never visits the premises of Delicate-Designs Ltd. He uses one room of his five-room private residence exclusively for business purposes. The total running costs of the house for the year were £5,000.

Chris's telephone bills are £600 per quarter. This is £300 per quarter higher than they were prior to the commencement of his working from home.

Chris is required to provide his own equipment. He purchased a computer for £1,800 on 6 April 2021.

Chris was born on 22 June 1959 and had the following other sources of income for 2021/22

£

Dividend income 8000

Building society interest received 5000

National lottery winnings 10,000

Required -

a) Discuss those factors that indicate that Chris should be treated as self-employed rather than as an employee in relation to his work for Delicate-Designs Ltd. You should confine your answer to the information given in the question.

b) Calculate Chris's income tax liability and his Class 2 and Class 4 National Insurance Contributions for 2021/22, if he is treated as self-employed in respect of his work for Delicate designs limited.