Seymour Whyte is a welder specialising in making and installing grills. For the past three months he had one client-Zantrax Ltd, a housing contractor. Whyte does all the grillwork. He owns his own welding plant. Zantrax set the schedule of work to be done and Seymour is expected to follow the schedule. He sends a bill every month for the amount of square feet of grills complete. He is paid gross.

a. Would you classify Mr. Whytes employment as a contract of service or contract for services?

b. Give two reasons for your answer above in (a).

c. What are the tax implications based on your answer in a

CASE Study 2

Leann Salabie is the sports director at Sea Castle Hotel on the north coast. She has set up a company called Sun & Fun Ltd. And she asked Sea Castle to pay her contract sum directly to Sun & Fun. Miss Salabie has no other clients, she does not use her own equipment. She has an assistant whom she pays. She often decides her own hours.

a. Would you classify Miss Salabie as a contract of service or a contract for services?

b. Give two reasons for your answer in (a) above.

c. What are the tax implications based on your answer in a