Can I do some extra freelance work for the company I work for?

[monkeybusiness]

8 hours ago, Paddy1000111 said:

Well I've worked for companies before, let's call them wefixplanes. Wefixplanes was working on a commercial airliner which needed a modification done on a wing spar. Wefixplanes didn't have enough manpower to do all the work so they took on 4 freelance workers who were skilled and done the modification countless times before. One guy ****************ed up and drilled a hole in the wrong place, it caused around 500k of damage. Wefixplanes was furious because they would have to go to the customer and explain why the wing is coming off of their multi-million pound jet liner. They asked the subcontractors for their insurance details so they can work it out and they said "oh, we should be covered by your insurance" to which they said "nope, you were to have your own insurance, it was in the contract you Signed here"... The 4 lads (luckily not me) as a heft deal to pay and I think eventually worked out a repayment plan. 

 

I'm sorry, but it comes down to your insurance company and the insurance policy fine print. It doesn't matter what you call it. 

 

Bare in mind you're either an employee of a company or an external company being subcontracted. There is nothing in-between, especially with the ir35 rules now.

In your example the claim would have been between wefixplanes and the plane owner (their customer). Wefixplanes PL insurance company would have to pay out for the damage - it isn’t the responsibility of the customer/affected 3rd party etc to ensure that the (correctly insured) company they employed meet every single possible criterion of employment law etc (if it was that easy to wriggle out of claims then no insurance company would pay anything to anyone ever...). 

It might be that wefixplanes’ insurance company subsequently look to make a claim against the subby with the drill - how that plays out entirely depends upon whatever contract has been drawn up between drill-man and wefixplanes. If they insisted that he carried insurance to work for them then so be it - there is no legal requirement though, and the affected third party (the plane owner in this case) has no grounds to chase the subby for damages as their contract is with wefixplanes. 

[Paddy1000111]

3 minutes ago, monkeybusiness said:

In your example the claim would have been between wefixplanes and the plane owner (their customer). Wefixplanes PL insurance company would have to pay out for the damage - it isn’t the responsibility of the customer/affected 3rd party etc to ensure that the (correctly insured) company they employed meet every single possible criterion of employment law etc (if it was that easy to wriggle out of claims then no insurance company would pay anything to anyone ever...). 

It might be that wefixplanes’ insurance company subsequently look to make a claim against the subby with the drill - how that plays out entirely depends upon whatever contract has been drawn up between drill-man and wefixplanes. If they insisted that he carried insurance to work for them then so be it - there is no legal requirement though, and the affected third party (the plane owner in this case) has no grounds to chase the subby for damages as their contract is with wefixplanes. 

Maybe I wasn't clear. Wefixplanes got someone in to do the work as a subbie and they ****************ed up. It's up to the subcontractor to rectify the issue and "make a mends" the aircraft owner had nothing to do with it although because of the delay they went to wefixplanes for compensation which they would have had to pay for and claim back of the subcontractor. 

 

My point is, unless the employer, in that case wefixplanes, has an insurance policy that covers any subcontractor they bring in then it's down to the subcontractor to make a mends. There's no legal requirement for insurance you are right, but it depends if you want to pay out of your own pocket for what you break. 

[Paddy1000111]

This topic has gone on far too long. To the OP:

 

• It's a dodgy territory on IR35, he's just getting out of doing paperwork at your risk
• If you go ahead make sure your employers insurance covers you

That about covers it 🤷‍♂️😂

 

[monkeybusiness]

4 minutes ago, Paddy1000111 said:

Maybe I wasn't clear. Wefixplanes got someone in to do the work as a subbie and they ****************ed up. It's up to the subcontractor to rectify the issue and "make a mends" the aircraft owner had nothing to do with it although because of the delay they went to wefixplanes for compensation which they would have had to pay for and claim back of the subcontractor. 

 

My point is, unless the employer, in that case wefixplanes, has an insurance policy that covers any subcontractor they bring in then it's down to the subcontractor to make a mends. There's no legal requirement for insurance you are right, but it depends if you want to pay out of your own pocket for what you break. 

So wefixplanes handed the entire job ‘lock-stock’ to the subby to complete however they saw fit? In that case the subby was ‘bone fide’, and would need their own PL insurance (and I’d imagine possibly PI insurance in the aviation industry). The customer would still claim off wefixplanes insurance though (who would have to pay out) - it would subsequently be an issue between wefixplanes, their insurer and the subby as to how the counterclaim panned out. In theory if the subby wasn’t insured then wefixplanes’ insurance company could chase wefixplanes themselves for the money... 

[Paddy1000111]

7 minutes ago, monkeybusiness said:

So wefixplanes handed the entire job ‘lock-stock’ to the subby to complete however they saw fit? In that case the subby was ‘bone fide’, and would need their own PL insurance (and I’d imagine possibly PI insurance in the aviation industry). The customer would still claim off wefixplanes insurance though (who would have to pay out) - it would subsequently be an issue between wefixplanes, their insurer and the subby as to how the counterclaim panned out. In theory if the subby wasn’t insured then wefixplanes’ insurance company could chase wefixplanes themselves for the money... 

Ding ding, exactly. I mean, in the industry you follow manuals, there's no "how you see fit". You usually have a "manager" from the company signing off the stuff you do but it's down to you to follow manuals.

 

But lets focus on arb, you climb a tree and start dropping logs and eventually send one through someone's house and see how eager the company you are working for is to jump in and say that it's all on them, they told you to fire that log through the persons roof and see how excited they will be sort it all out. Especially as most guys in this industry don't seem to bother with contracts. 

This is the difference between freelancing for anyone and doing odd job extra days for people you know. 

[eggsarascal]

I've had a read up on this today, for those of us who are genuine freelancers nothing whatsoever will change. When I say genuine I mean those of us who do a day or three here, a week or two there, a week on your own work.

[eggsarascal]

Put £400/day into this calculator, no wonder the feckers want to shoehorn us into IR35.

 

IR35 Legisation: guidance and help to stay outside the tax rules

WWW.CONTRACTORCALCULATOR.CO.UK

---

Find out if IR35 applies to you. The rules explained, a free online status test, and calculate the extra tax if you are...

 

[monkeybusiness]

19 minutes ago, Paddy1000111 said:

Ding ding, exactly. I mean, in the industry you follow manuals, there's no "how you see fit". You usually have a "manager" from the company signing off the stuff you do but it's down to you to follow manuals.

 

But lets focus on arb, you climb a tree and start dropping logs and eventually send one through someone's house and see how eager the company you are working for is to jump in and say that it's all on them, they told you to fire that log through the persons roof and see how excited they will be sort it all out. Especially as most guys in this industry don't seem to bother with contracts. 

This is the difference between freelancing for anyone and doing odd job extra days for people you know. 

It’s irrelevant ‘how eager the company you are working for is to jump in and say that it's all on them’. The householder would claim against the company employed to do the job, nobody else. That’s the end of it from an insurance point of view. If the company subsequently want to pursue a claim against the subby that’s a different matter altogether, and would come down to whatever contract was in place between them. 

[Paddy1000111]

2 minutes ago, monkeybusiness said:

It’s irrelevant ‘how eager the company you are working for is to jump in and say that it's all on them’. The householder would claim against the company employed to do the job, nobody else. That’s the end of it from an insurance point of view. If the company subsequently want to pursue a claim against the subby that’s a different matter altogether, and would come down to whatever contract was in place between them. 

Yea, exactly. I'm not saying that the company you're working for is going to f off before you get out the tree and say it's your problem bye. I just know that people will do anything to avoid taking a financial hit, especially when they don't know you at all and you don't matter to them. Contracts matter and so does the fine print. It's bad practice to just assume that you're insured and covered by others policies because you read online once that if you're working for someone else and pretending to be part of their team that you're fully insured. This topic is going on far to long 🙄

 

I didn't think this was that hard:

• IR35 applies to everyone. It does effect the guys doing what the OP wants to do and people running long contracts. Employment law does matter, not because of tax but because it is the rules that the insurance company will use to work out if you are covered or not and they will do anything to wiggle out of a claim. There's a defined line between employee and subcontractor and PAYE employee registration can and will be used against you. 
• Don't assume, check you are insured no matter how long you've been doing it or what a website says. Policies change no matter how long you have been with a company.
• Always have a contract with the person you're working for, be it to prove insurance or to get your money from a non-payer

This isn't argument stuff, it's just the common sense approach to running a business and not having bailiffs coming and taking your s*** because you failed to insure yourself or run a business properly

[Jamie Jones]

4 hours ago, Rich Rule said:

Ask them the question again and say you would like to use a freelance guy. Then see what the answer is.

Re Insurance: It is not just the insurance company. I understand what you are saying. But it is not as simple as you make it out to be. 

For the work and services you supply as a sub contractor you have to be insured. The main contractor has to be insured for the whole project.

if something goes wrong the main contractors insurance company will look to mitigate their losses. If you think one insurance company will take the whole hit, you will be mistaken.

From a different perspective I did a Welsh Government, Business Wales Introduction to being an employer training day where they covered a whole host of aspects from being an employer, hiring subcontractors, does an non-employed person become an employed person in the eyes of HMRC. Plus various aspects of engaging sub contractors. Even to the point where some sub contractors have to be taxed at source. This happen big time in the construction industry.

It has caused a major hick up in how I move and grow my business.

on the Intro to being an employer day there were about 15 other small businesses who were all having to rethink how they were operating with hired in labour / sub contractors.

You now really do have  to demonstrate that you really are a separate sub contract business. I think that this is to push more people into being LTD and VAT registered.

Being what is described as Freelance / Casual is very much a thing of the past. 

Mad a sole trader you really do have to be able to demonstrate you truly are independent.

This whole issue has caused big problems with companies that uses employment agencies for contracted labour. If I understand it correctly the agency pays you on PAYE zero hours now and you can’t work for them as a sole trader anymore.

I am in the position where I need a second person for 8-10 months of the year. 

Previously I could use people very easily as freelance/self employed. Now I can’t. 

I have had to register as a PAYE employer.

This whole situation is to get the state out of paying as much in pensions, getting more employees NI contributions, pushing more small businesses into being VAT registered. Etc.

My accountant is convinced that the VAT threshold will be lowered greatly.

There was talk last year that anyone who was self employed earning £20k or more would have to go VAT registered.

As always they target the small businesses while turning a blind eye to big business.