Was I Really Self Employed?
Discussion
This has been prompted by this post and some of the replies in it;
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
In my last 'job' which I left just before Christmas I was self-employed (we had no choice) but I was paid a guaranteed income plus a bonus if I exceeded target, I had performance appraisals, a line manager, I had to request days off and I used IT provided by my 'employer' and I also had to go where they told me when they told me.
It seems from some of the posts in that other thread that HMRC would probably consider me to have been employed so my question is what the possible consequences of this would be if I was to query this with them. Would I be dropping my ex-employer in the brown stuff (which is no more than they deserve) or would I be causing problems for myself or is it just a grey area and nothing would come of it?
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
In my last 'job' which I left just before Christmas I was self-employed (we had no choice) but I was paid a guaranteed income plus a bonus if I exceeded target, I had performance appraisals, a line manager, I had to request days off and I used IT provided by my 'employer' and I also had to go where they told me when they told me.
It seems from some of the posts in that other thread that HMRC would probably consider me to have been employed so my question is what the possible consequences of this would be if I was to query this with them. Would I be dropping my ex-employer in the brown stuff (which is no more than they deserve) or would I be causing problems for myself or is it just a grey area and nothing would come of it?
The good news is that you are more or less in the clear. It does seem that you should REALLY have been handled as a bona fide employee by the people you were working for.
If that had been the case, they would have applied PAYE to what they wwere paying you and deducted Class 1 Employee's NI. They would also have neded to pay the Employer's NI contribution - which, of course, is the main reason they would prefer to treat you as self-employed rather than an employee as the mployer's NI is quite onerous.
If they are ever inspected by HMRC and the fact that they are paying employees as if they were outside buisinesses (which is what self employment implies), THEY will be asked by HMRC to calculate the uiderpaid NI contributions (Employee's and Employer's).
They MAY have to pay some PAYE as well but HMRC will have received from you Income Tax under the self assessment system so may only ask the "employer" for the extra PAYE that might be due on what they paid you.
I presume you needed to set yourself up with HMRC as a self employed individual and signed up for
a) Self Assessment tax returns and
b) Class 2 Self Employed NIO Contributions
If that had been the case, they would have applied PAYE to what they wwere paying you and deducted Class 1 Employee's NI. They would also have neded to pay the Employer's NI contribution - which, of course, is the main reason they would prefer to treat you as self-employed rather than an employee as the mployer's NI is quite onerous.
If they are ever inspected by HMRC and the fact that they are paying employees as if they were outside buisinesses (which is what self employment implies), THEY will be asked by HMRC to calculate the uiderpaid NI contributions (Employee's and Employer's).
They MAY have to pay some PAYE as well but HMRC will have received from you Income Tax under the self assessment system so may only ask the "employer" for the extra PAYE that might be due on what they paid you.
I presume you needed to set yourself up with HMRC as a self employed individual and signed up for
a) Self Assessment tax returns and
b) Class 2 Self Employed NIO Contributions
Thanks Eric. Yes I've been doing self assessment etc. I was mainly curious as to what the consequences might be and you've answered that.
In a way it would be nice to drop them in it as I wasn't treated very well by them but I suspect it would be more trouble than it's worth so I'll just put it behind me.
In a way it would be nice to drop them in it as I wasn't treated very well by them but I suspect it would be more trouble than it's worth so I'll just put it behind me.
I didn't take it any further as it would be a lot of hassle and I'm not sure what the benefit to me would be.
I know there was a case late last year of someone who sued his ex 'employer' for constructive dismissal claiming that although he was technically self employed he was paid a fixed income plus bonus, was told what hours to work and what offices to work in and had to apply for holiday. I believe the provisional judgement came down in his favour but I don't know what the final outcome was.
If he was ultimately successful (I will see if I can find out if he was tomorrow) then I was in the same position. I have spoken to HMRC (not specifically about this) and I asked whether my 'employer' was in the wrong but they didn't seem interested. However, in my experience, every time you speak to someone at the Revenue they seem to take a different view on what you tell them.
I suppose I could always go back to my old employer and tell him that I'm thinking of approaching the Revenue about how he was paying me but if he pays me the bonus he held back last year I might not bother. Is that too much like blackmail?
I know there was a case late last year of someone who sued his ex 'employer' for constructive dismissal claiming that although he was technically self employed he was paid a fixed income plus bonus, was told what hours to work and what offices to work in and had to apply for holiday. I believe the provisional judgement came down in his favour but I don't know what the final outcome was.
If he was ultimately successful (I will see if I can find out if he was tomorrow) then I was in the same position. I have spoken to HMRC (not specifically about this) and I asked whether my 'employer' was in the wrong but they didn't seem interested. However, in my experience, every time you speak to someone at the Revenue they seem to take a different view on what you tell them.
I suppose I could always go back to my old employer and tell him that I'm thinking of approaching the Revenue about how he was paying me but if he pays me the bonus he held back last year I might not bother. Is that too much like blackmail?
there's been quite a bit of this in some aspects of 'training' hinging around the definitions of self employed and whether some 'self employed' trainers in fact had a series of casual jobs with different training providers because the training providers supplied syllabuses, unfiorms issued the certificates etc in the name of the training provider.
As has been suggested it;s a way of avoiding employers NI and trying to evade payment of income tax, especially if the employee also colludes to hide these earnings from HMRC ( which for a 'pin money' job on top of other employment or a police / fire / military pension is quite possible)
As has been suggested it;s a way of avoiding employers NI and trying to evade payment of income tax, especially if the employee also colludes to hide these earnings from HMRC ( which for a 'pin money' job on top of other employment or a police / fire / military pension is quite possible)
In certain "professions" treatment of staff as "self employed" seems to be the norm - van drivers, dental hygenists, sound and TV studio personnel etc. In reality, most of these are not true "sole-trading" situations but HMRC on the whole seem to be ptrepared to accept these arrangements. Every now and then, however, they carry out a "blitz" on some or other activity. In the 1990s the acting profession was attacked, as were roadies and other performance/entertainment related technical support staff.
It is not that unuusual for people who have acted in a self employed situation for many years to succeed in unfair dismissal and employer health and safety cases. Just because someone has been taxed as self employed does not always mean that other legislation will see them as self employed - in certain circumstances.
It is not that unuusual for people who have acted in a self employed situation for many years to succeed in unfair dismissal and employer health and safety cases. Just because someone has been taxed as self employed does not always mean that other legislation will see them as self employed - in certain circumstances.
Hi forgive my ignorance, but what are the advantages of being self employed in this situation over being paye ? Its got me thinking, where i work yes we do get paid for holidays ( 20 days a year ) but if im ill no pay. My tools are all payed for by me. And my work clothes are bought by me, i assume if i was self employed i could claim on these? ?
dal2litrefrogeye said:
Hi forgive my ignorance, but what are the advantages of being self employed in this situation over being paye ? Its got me thinking, where i work yes we do get paid for holidays ( 20 days a year ) but if im ill no pay. My tools are all payed for by me. And my work clothes are bought by me, i assume if i was self employed i could claim on these? ?
You are not allowed to "chose" your employment/self-employment status.If you are an employee, you are legally entitled to paid holidays and to Satutory Sick Pay if ill. If your employer is not providing these he is breaking the law.
If you are an employee but have to provide your own tools, you are allowed make a tax relief claim for the cost of replacing or repairing those tools. This type of relief is not for the self-employed only.
Eric Mc said:
You are not allowed to "chose" your employment/self-employment status.
If you are an employee, you are legally entitled to paid holidays and to Satutory Sick Pay if ill. If your employer is not providing these he is breaking the law.
If you are an employee but have to provide your own tools, you are allowed make a tax relief claim for the cost of replacing or repairing those tools. This type of relief is not for the self-employed only.
Hi yes they provide statutory sick pay but its only after the 1st 3 days off( so your over the worst of the cold / dodgy kebab by then ) and then its the minimum amount ( iv never been ill long enough to use it ), and why can i not choose my type of employment , people go self employed all the time ??? dont get me wrong im not spoiling for an argument , just asking , does anyone know who i should contact to apply for the tax relief on tools and work wear ? cheers for any ideaIf you are an employee, you are legally entitled to paid holidays and to Satutory Sick Pay if ill. If your employer is not providing these he is breaking the law.
If you are an employee but have to provide your own tools, you are allowed make a tax relief claim for the cost of replacing or repairing those tools. This type of relief is not for the self-employed only.
HMRC legislation states that employment/self employment status is not a matter of choice but a matter of fact. The cicrumstances under which you are engaged and accept an appointment and how you engage with the organisation you work for or with determines whether you are an employee or something else.
A person cannot be an employee of an organisation one day and be paid as self-employed by the same organisation the next day.
Read this -
http://www.hmrc.gov.uk/employment-status/index.htm
A person cannot be an employee of an organisation one day and be paid as self-employed by the same organisation the next day.
Read this -
http://www.hmrc.gov.uk/employment-status/index.htm
Reading that HMRC article Eric refers to has just convinced me that my case was borderline. I don't think I'd get anywhere by taking any action against my ex 'employer' although I'd love to see him squirm. The more I think about it the more I think I would have a strong case for constructive dismissal if I could show that I was an employee but proving I was an employee would not be easy according to that article.
I think I will just put it behind me and concentrate on the future.
I think I will just put it behind me and concentrate on the future.
Whether or not you are self-employed as far as HMRC is concerned has no direct bearing on whether or not you are an employee for the purposes of qualifying for employment protection legislation.
Generally, a remedy for unfair dismissal will require proceedings to be started within three months of dismissal.
Generally, a remedy for unfair dismissal will require proceedings to be started within three months of dismissal.
Edited by Zeeky on Thursday 31st May 15:30
Zeeky said:
Whether or not you are self-employed as far as HMRC is concerned has no direct bearing on whether or not you are an employee for the purposes of qualifying for employment protection legislation.
That's what I was saying. But people don't always realise this.Edited by Zeeky on Thursday 31st May 15:30
Zeeky said:
Whether or not you are self-employed as far as HMRC is concerned has no direct bearing on whether or not you are an employee for the purposes of qualifying for employment protection legislation.
Generally, a remedy for unfair dismissal will require proceedings to be started within three months of dismissal.
That's what I was saying. But people don't always realise this.Generally, a remedy for unfair dismissal will require proceedings to be started within three months of dismissal.
Edited by Zeeky on Thursday 31st May 15:30
Sorry to bump this again. My hygienist friend has just called, she's going through an unfortunate change in circumstances. This means she will have to take the kids to school herself and start work an hour later.
One practice has said no-way.
As a self-employed person surely the main benefit is to pick and chose your hours, within reason?
Can anyone offer any advice please?
One practice has said no-way.
As a self-employed person surely the main benefit is to pick and chose your hours, within reason?
Can anyone offer any advice please?
Rach* said:
Sorry to bump this again. My hygienist friend has just called, she's going through an unfortunate change in circumstances. This means she will have to take the kids to school herself and start work an hour later.
One practice has said no-way.
As a self-employed person surely the main benefit is to pick and chose your hours, within reason?
Can anyone offer any advice please?
Even self employed people have to accomodate their customer(s) from time to time.One practice has said no-way.
As a self-employed person surely the main benefit is to pick and chose your hours, within reason?
Can anyone offer any advice please?
If the people she is working for are being so determinate about the hours she works and the time she takes off, they could be seen to be excercising control over her that would indicate she is really an employee.
Does she get paid when sick?
Does she get holiday pay?
Can she replace herself with someone else of her own chosing?
Does she have more than obe customer?
Does she have to take out insurance to cover the work she does?
If she makes a mistake, who pays to have the mistake fixed?
Does she advertise her services?
Does she have a place of business?
Does she use her own tools and equipment?
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