Zero hours contracts?

[kevinjohnsonmbe]

Surely a subbies should get a rate that he has decided.

 

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You'd think so wouldn't you.... and that, along with asking subby to include UTR on their invoice would both provide a "reasonable" level of due diligence protection against later claims for compensatory "employed" status.

 

Ultimately, HMRCs employment status calculator is the best starting point and the output is dependent upon input data.

[Rough Hewn]

14k a year, or over xyz hours a week per annum (30) I think?

Makes a subbie an employee.

According to my insurance people.

Need employers liability if you have anyone work with you.

Bit of a mine field!

[emoji3]

 

 

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[benedmonds]

14k a year, or over xyz hours a week per annum (30) I think?

Makes a subbie an employee.

According to my insurance people.

Need employers liability if you have anyone work with you.

Bit of a mine field!

Arbtalk

 

You could be an employee only working 1 day a month. EL Insurance is not a issue to me if you pay someone to work for you who is not a true subcontractor you need it.

 

It's the hmrc or an employment tribunal deciding that your subbies were actually employees that is the potential expensive issue..

[Tom D]

The insurance definition of an employee and HMRC's definition are completely different. The whole thing is as clear as mud. Hats off to you for doing the right thing, we do the same, it's hard when many competitors don't. Let's not forget that employers pay 13.8% on top of employees wages so there's a big incentive to use subbys. Plus we're now obliged to provide pensions too.

This situation is not just restricted to the arb industry, there are 4.6 million self employed people out there now, way more than there ever have been. All these people are paying way less tax than they would if they were employed. This is a massive headache for HMRC, it's costing the country billions, the upshot of this is that they either find a way to tax these people or they put even more taxes on the employed or on businesses. Either way it's not good. For the good of the country we need to change the law on self employment.

 

Fwiw we have full time employees and use bona fide subbys as well as zero hours type staff. Although we don't have any on our books at the moment, I'm not sure what the pension obligations would be on zero hours guys either.

[Kev Stephenson]

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.

 

 

 

 

I ask that the contractor supplies an invoice with UTR which shows they are registered with HMRC. You can phone HMRC and make sure this tallies to the company/person you are using and that they submit self assessments or accounts as required.

 

I state on their initial employment documentation (health history, emergency contact info, qualification checklist, etc) that all payments made to them will be gross and the contractor is required by law to declare all income from me and pay any taxes due. This is signed by the contractor before they start.

 

I also only pay contractors by BACS and state in the reference box 'subcontracting, invoice number xyz'. Pretty hard to hide this from HMRC or say it was my wages, I thought the employer paid the tax.

 

My accountant and tax adviser both state I am doing more than enough to satisfy the 'all reasonable measures' clause the HMRC state should an issue arise with a subbies tax.

 

If you were to list someone as employed would you state this is there primary job (therefore entitling them to use there tax free element with you) or an additional job where tax code could be zero?

 

If employed are you supplying all PPE and do they take it home to potentally use with other companies? What about there vehicle, do you insure it for their business use or insist they meet at your yard? What if while they are subbing elsewhere they break a leg. Are you going to pay 6 plus weeks sick pay or even be liable for a claim for injury whilst employed (unlikely)???

[Khriss]

£150 an I will pay fr the chips K

[Haironyourchest]

The insurance definition of an employee and HMRC's definition are completely different. The whole thing is as clear as mud. Hats off to you for doing the right thing, we do the same, it's hard when many competitors don't. Let's not forget that employers pay 13.8% on top of employees wages so there's a big incentive to use subbys. Plus we're now obliged to provide pensions too.

This situation is not just restricted to the arb industry, there are 4.6 million self employed people out there now, way more than there ever have been. All these people are paying way less tax than they would if they were employed. This is a massive headache for HMRC, it's costing the country billions, the upshot of this is that they either find a way to tax these people or they put even more taxes on the employed or on businesses. Either way it's not good. For the good of the country we need to change the law on self employment.

 

Fwiw we have full time employees and use bona fide subbys as well as zero hours type staff. Although we don't have any on our books at the moment, I'm not sure what the pension obligations would be on zero hours guys either.

 

Surely there are other ways to look after the "good of the country" instead of punishing those enterprising people who are pulling their own weight? The self employed are the backbone of western democracies - leave them alone - and cut the fat instead - and by that I mean freeloaders and government.

[Richard 1234]

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 think that's called "rolled up" pay to include the things you mention and it's illegal!

 

 

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[Haironyourchest]

I think that's called "rolled up" pay to include the things you mention and it's illegal!

 

 

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Yes but only if you pay employees that way (it supposedly dis-incentivises them to take their holiday entitlements, more EU meddling) Its different for subbies, since they are responsible for setting their own holidays. Non?

[Tom D]

Surely there are other ways to look after the "good of the country" instead of punishing those enterprising people who are pulling their own weight? The self employed are the backbone of western democracies - leave them alone - and cut the fat instead - and by that I mean freeloaders and government.

 

Totally agree with all of that, but the economy is changing, and unless HMRC adapts the deficit will only get bigger. Much as I hate paying tax, I can still see the need for it.