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Are your workers classed as self employed ?

Scrubber

Member
Messages
34
Location
Lincoln
Weve all seen the news lately. The case of the plumbing company that used self employed staff rather than employed staff. I find myself in a similar position. I have 2 vans, both being manned by 2 self employed staff.

These staff wear the company uniform, drive the company vans however they all are able and do do their own work if they so desire.

If I were to employ them their wages would halve over night as I'd have to give them holiday pay, pension etc.

Anyone else in a similar position?

 
Here is something I posted a short while ago.

Hi @Duncs, The reason I ask is because I to am looking at taking someone on at the start of March. I thought it would be as simply as getting the guy to register as self employed so he can sort out all his Tax ,NI and PLI obligations, saving me the hassle. However I have been advised to by my accountant that if I am supplying the equipment, uniform and work load that he must categorically be treated as an employee. Making me responsible for all his Tax ,NI and PLI not to mention holiday pay, sick pay and pension as well as other things.
After doing much research on this area how I understand it is this:

Self-employed is a situation in which an individual works for himself instead of working for an employer that pays a salary or a wage. A self-employed individual earns his income through conducting profitable operations from a trade or business that he operates directly. They have the final say in how the business is run, They risk their own money in the business,They are responsible for meeting the losses as well as taking the profits, They provide the main items of equipment they need to do the job, They have to correct unsatisfactory work in your own time and at your own expense. The things most of us do on a daily basis.

If a person solely carries out work that YOU set out using the tools that YOU also supply and is paid by only you, then he will be classed as an employee by the HRMC.

Once again this is how I've been advised and as to how I understand it reading stuff from the HRMC site as well as others. And why would they make it easy for us anyway /emoticons/wink.png
 
Thanks Greener for that. I'm just wondering as my guys do cleaning work for themselves,and they also do some small amount for another window cleaner when required, they'd been seen as freelance? Therefore I would be ok in classing them as self employed?

I'm 100% sure they would prefer to be seen as self employed because their hourly rate is twice what it'd be if they were on my books.

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Here is exactly where you stand..... not a bunch of pub talk expertise but the facts.

If the majority of the 'employees' (for the sake of this conversation) income is earnt working for you then they are are considered an employee. Does not matter if own van, tools etc they are an employee.

Now a couple of years back I had the builders clean on New Street Birmingham. This contract (and the company that subbed it to us) were our largest source of income for the duration of the task. We were however still subs and not employees as the 'contract' had a life span. In short it had a definitive start and end date.

Your agreement with your subs is ongoing, whilst they may still be free to do other jobs you are their main source of income and hence they are employees.

When you do actually look into it putting them on payroll should not effect their money too much at all.... pensions are so negligable that the coffe you have whilst discussing it will cost you more. The tax and NI should be no different to them IF they are being honest and paying it as they should. As for holiday pay well that's just life, this can be comped by increasing the number of weekly jobs they do for you instead of others.

Big plus..... you go from being a window cleaner that hires the odd subb here and there to being seen as a professional small business by HMRC, the banks and so on.

Go talk to a professional accountant and do it right.

 
It's the HMRC's own tool . Employment status indicator . It doesn't seem to cover everything although I can easily get my subs to come out as self employed with this tool . You can also print out a PDF of the results to show HMRC if ever your company is investigated.

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I have also had a bit of a headache with this issue and although the area of employed/ self employed is supposed to be cut and dry there are a few "grey areas" that were pointed out to me when I asked my accountant the same thing.

If you are paying an hourly/daily rate or salary then technically yes they should be employed if they work for you for longer than 3 months. The grey area appears when you pay them on a "commission" basis i.e. 40% that way they are still technically working for themselves. I'm not sure of the exact ins and outs as I'm not an accountant or have a degree in tax law so don't grill me on this. /emoticons/wink.png but it did make sense when he explained it, its more of a loophole.

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