During the tax year 2016-17 this client worked as an agency photographer and had an income of 22K for the period, for which tax was paid on self-assessment basis. He is billed at around £40ph.
In 2017, as a pedestrian, he was hit by a car and left permanently disabled with a spinal defect and limited walking ability. As a result of this he was no longer able to work and is left in constant pain.
His mortgage provider had built-in insurance as part of his premium to cover for loss of work and so he invoked the policy making a claim from the insurer.
The insurer firstly wanted proof of illness/disability which was provided, then proof of business closure/non-trading status, which was also evidenced through bank accounts etc.
The insurer then asked about earnings in the current tax year (2017-18) vs previous tax year (2016/17) and suggested that they were "concerned" that the persons income had not actually dropped, as he did undertake the occasional portrait job from a seated position. It was demonstrated that the income had fallen by around 6000%.
The insurer became increasingly aggressive in their pursuit of this disabled man and left him with the impression that he was being investigated for fraud. Though never expressly stated this.
After a battery of telephone interviews, forms and spreadsheets, the insurer declined to pay out on the policy. They stipulated that during the period where he was undertaking work on an agency basis, he was not working an average of 16 hours per week and that is the legal definition of employment.
However, we have spoken to an AutoCAD consultant who works on commissions of £200 per hour and works to 5 hours a week with an income of around £52K pa. If the insurance criteria is correct, then this gentleman is not 'working' either.
We also spoke to a lawyer billing hours privately at £400 ph and working for 10 hrs per week (£208K pa). Also not 'working' under the definition used by the insurer.
Finally, an eminent plastic surgeon earning around £5000 per job, which affords him 12 hours work per week and an income of £780K pa. On the assumption that he was to lose the use of his hands, (privately insured) he would not be able to work. According to the insurer he would also be classed as not working either.
Surely, there is a legal definition of whether someone is an employed earner, that does not rely upon working 16+ hours per week? Does anyone know?
Many thanks in advance.