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Business Management Discuss the day to day running of your business here. Discuss accounting, Insurance and staff issues.


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Old 3 Days Ago   #1 (permalink)
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Zero hours contracts?

As I see it many "subbies/freelancers" in this industry would be seen as employees by the HMRC. I want to ensure we are compliant and above board, for my protection and theirs..

If you supply your own saw you might just be able to claim you are not an employee, but I regularly use people as extra groundies day to-day often while they are studying at college. In the past I have always taken treated them as freelancers and paid them a daily rate. We are now starting to put them on the payroll, so we pay NI tax etc... italso means they will be entitled to holiday and sick pay etc..

They need contracts, I can not guarantee them work so as I see it a zero hours
contract.. I have no experience with a zero hours contract only the negative press. Anyone use them?

Please don't turn this into a big employer keeping down the working man thread.
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Old 3 Days Ago   #2 (permalink)
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Re: Zero hours contracts?

Hi Ben, needless to say the situation you describe is not uncommon in the industry but I don't know the "ins and outs"...which I'm kinda glad about as it is something of a challenging area (AKA 'minefield.')

Two suggestions, in addition to the feedback here:

1. See ACAS website Zero Hours Contracts | Acas advice and guidance | Acas
2. Join FSB for advice (remember if you join as an ArbAC, or AA Member, you get the 30 registration fee waived...and the AA 'research fund' gets a donation (50.))

I think the recent changes, as described in the ACAS link, mean the preference / expectation is that you will guarantee a min. no. of hours per week, e.g. 16, and go from there but then that's effectively p/t employment is it not...aghhhhh.

Good luck n sorry we can't offer anything particularly to help

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Paul
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Old 3 Days Ago   #3 (permalink)
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Re: Zero hours contracts?

Good thread Ben, and fair play to you for doing the right thing.
Zero hours would seem the only option from my take on it.
I'm sure if you call HMRC they will be very helpful.
(Actually they probably won't be, but it would be good to hear their take on it).
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Old 3 Days Ago   #4 (permalink)
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Re: Zero hours contracts?

Para 2 is really interesting Paul, never heard that before but it is a substantial incentive to join both AA & FSB!
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Old 3 Days Ago   #5 (permalink)
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Re: Zero hours contracts?

I have the same issue when I tend to use a lad during his college holidays to clear any back log I may have or cover holidays. He may go 6 weeks with no work from me due to college then work solid for 2 weeks. He currently registers as self employed and earns not enough to pay tax so gets to keep the lot, that covers me as I get an invoice from him. Looked at putting him on contract but there appears no gain and a hit for me having to pay tax and NI.
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Old 3 Days Ago   #6 (permalink)
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Re: Zero hours contracts?

Quote:
Originally Posted by Kev Stephenson View Post
I have the same issue when I tend to use a lad during his college holidays to clear any back log I may have or cover holidays. He may go 6 weeks with no work from me due to college then work solid for 2 weeks. He currently registers as self employed and earns not enough to pay tax so gets to keep the lot, that covers me as I get an invoice from him. Looked at putting him on contract but there appears no gain and a hit for me having to pay tax and NI.

Zero hour contracts gets a bad press for many justifiable reasons - big companies employing staff virtually, or actually, full time / long term but avoiding statutory and (perhaps) moral obligations.

Surely that's an entirely different ball game as compared to infrequent / casual peaks and troughs in work flow and providing (for want of a better phrase) "holiday work" for students.

The system you mention above strikes me as sensible, fair and reasonable. I do exactly the same.
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Old 3 Days Ago   #7 (permalink)
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Re: Zero hours contracts?

Quote:
Originally Posted by Kev Stephenson View Post
I have the same issue when I tend to use a lad during his college holidays to clear any back log I may have or cover holidays. He may go 6 weeks with no work from me due to college then work solid for 2 weeks. He currently registers as self employed and earns not enough to pay tax so gets to keep the lot, that covers me as I get an invoice from him. Looked at putting him on contract but there appears no gain and a hit for me having to pay tax and NI.

Your pay to him as a self employed persons should include those elements any way. Not just minimum wage or living wage or even better. Plus some for holiday & sickness too.

IE if you pay an employee 10 then a subbie should get 10 PLUS 1/13Th for holidays PLUS 10% for NI plus X% for possible sickness PLUS X% for the insecurity of the job.
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Old 3 Days Ago   #8 (permalink)
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Re: Zero hours contracts?

Quote:
Originally Posted by Kev Stephenson;
I have the same issue when I tend to use a lad during his college holidays to clear any back log I may have or cover holidays. He may go 6 weeks with no work from me due to college then work solid for 2 weeks. He currently registers as self employed and earns not enough to pay tax so gets to keep the lot, that covers me as I get an invoice from him. Looked at putting him on contract but there appears no gain and a hit for me having to pay tax and NI.
It is how we used to work, but my concern is that HMRC decide that he is an employee and come and claim the tax, the employer would be liable for it as I understand. Not an issue when you know he is not earning enough to pay tax but we use various guys and I have no idea what they are doing when not working for me.

Quote:
Originally Posted by Justme View Post
Your pay to him as a self employed persons should include those elements any way. Not just minimum wage or living wage or even better. Plus some for holiday & sickness too.
IE if you pay an employee 10 then a subbie should get 10 PLUS 1/13Th for holidays PLUS 10% for NI plus X% for possible sickness PLUS X% for the insecurity of the job.
I am pretty sure that you can't do this with an employee. It is what we were doing with our freelancers/subbies, they got a better day rate then a comparable employee to cover the holiday etc. If you go to the HMRC web site there is a test to determine if you can be classified as self employed and the casual ground workers come out as employees..

This means that someone who have taken on as and payed as a self employed freelancer could retrospectively claim they were an employee, take the employer to an employment tribunal and be awarded holiday pay etc..
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Old 3 Days Ago   #9 (permalink)
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Re: Zero hours contracts?

Quote:
Originally Posted by benedmonds View Post
This means that someone who have taken on as and payed as a self employed freelancer could retrospectively claim they were an employee, take the employer to an employment tribunal and be awarded holiday pay etc..
And of course if they fail to pay their income tax the revenue will come and claim it from you.
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Old 3 Days Ago   #10 (permalink)
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Re: Zero hours contracts?

Quote:
Originally Posted by Justme View Post
Your pay to him as a self employed persons should include those elements any way. Not just minimum wage or living wage or even better. Plus some for holiday & sickness too.

IE if you pay an employee 10 then a subbie should get 10 PLUS 1/13Th for holidays PLUS 10% for NI plus X% for possible sickness PLUS X% for the insecurity of the job.
Surely a subbies should get a rate that he has decided.

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