Page 56 - P6 Slide Taxation - Lecture Day 7 - Various Topics

Independent contractor

• Apart from discussing the statutory tests above, the second tool used to determine whether a
person is an independent contractor or an employee is the common law tests.
• The common law dominant impression test is essentially an analytical tool that is designed for
application in the employment environment to establish the dependence or independence of a
person.
• The common law dominant impression test makes use of several indicators, of differing significance
or weight, which have to be applied in the relevant context. The indicators are interrelated and
point to whether or not there has been the ‘acquisition of productive capacity’ (that is, of labour
power, capacity to work, or simply effort).
• It is possible that a person who meets the requirements of the statutory tests and is therefore

deemed not to be carrying on an independent trade, could still be classified as an independent
contractor in terms of the common law dominant impression test.
• The last-mentioned test therefore overrides the statutory tests.

• In general, professional fees payable to independent contractors or self-employed persons such as
medical practitioners, public accountants and auditors, architects, quantity surveyors, attorneys
and advocates are not subject to the deduction of employees’ tax.

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