Self employed or employed

[samarb]

He's right to put you on the books and probably not really that keen on doing it as it would not be in his benefit. Look at it this way he would now be responsible for your liability, your PPE, holiday, sickness, Paternity, pension, he can just sack you if you mess up. He was probably advised to do this due to the impending crack down on casual labour the list goes on. With the tax side of it you would be able to opt out of the NI for SE work as you would be covering it with the employed work, your SE tax bill will be less as you overal expenses will be the same but your SE income will be less, you will also be able to off set tax paid in PAYE from SE earnings. I do know a fair bit about this as when I started I was SE and PAYE and now in the same position as your main contractor and with Universal Credit eventually being roled out there will be a lot more of this going on. Maybe CIS system would be of better use to this industry.

[openspaceman]

Look at it this way he would now be responsible for your liability, your PPE,

 

He is already if you work under his direction

 

 

holiday, sickness, Paternity, pension,

 

Grey area but I agree

 

he can just sack you if you mess up.

 

I think you meant cannot, because it's quite difficult to dismiss an employee without going through full process. In fact even if he doesn't put you on PAYE you will have a case that an employment did exist if taken to court or tribunal, as samarb says the employer is on a hiding to nothing by keeping you self employed apart from his saving of the employer's contribution to NI.

 

He was probably advised to do this due to the impending crack down on casual labour the list goes on. With the tax side of it you would be able to opt out of the NI for SE work as you would be covering it with the employed work, your SE tax bill will be less as you overal expenses will be the same but your SE income will be less, you will also be able to off set tax paid in PAYE from SE earnings. I do know a fair bit about this as when I started I was SE and PAYE and now in the same position as your main contractor and with Universal Credit eventually being roled out there will be a lot more of this going on. Maybe CIS system would be of better use to this industry.

 

Yes this is how I see it.

[Hodge]

As someone who uses labour only contractors I'm in a similar position, I use a guy 4/5 days a week when I need him, I can't afford to employ him as that would put me over the vat limit so he invoices me and I pay the invoice. The problem is I don know if he will pay the tax or his NI, I am asking him for his UTR number when we go back and seeing if he is even registered, I don't want to loose him As he is a good worker. Any ideas? Sorry for the thread hi jack:)

[samarb]

Meant to say cant sack you, typo. Also there is a cost in employing somebody even down to supplying payslips I'm sure if he could be would keep it SE.

[likeitorlumpit]

As someone who uses labour only contractors I'm in a similar position, I use a guy 4/5 days a week when I need him, I can't afford to employ him as that would put me over the vat limit so he invoices me and I pay the invoice. The problem is I don know if he will pay the tax or his NI, I am asking him for his UTR number when we go back and seeing if he is even registered, I don't want to loose him As he is a good worker. Any ideas? Sorry for the thread hi jack:)

 

I think you may be OK as you are using him occasionally.

Just interested though how the vat thing applies- surely your turnover is the same whether he is self employed or employed.

Unfortunately this grey area exists and it is quite easy to look self employed with letterheads etc but completely flying under the taxmans radar. We all know how this happens and can become complicit because it means the guys that work occasionally are more motivated -more money:thumbup1:

One way round this I believe are the businesses who cash pay cheques. AIUI they take 10% but that means whoever is cashing the cheque saves the taxman knowing about the money. Not 100% on this scam but I think thats how it works

[Hodge]

I think you may be OK as you are using him occasionally.

Just interested though how the vat thing applies- surely your turnover is the same whether he is self employed or employed.

Unfortunately this grey area exists and it is quite easy to look self employed with letterheads etc but completely flying under the taxmans radar. We all know how this happens and can become complicit because it means the guys that work occasionally are more motivated -more money:thumbup1:

One way round this I believe are the businesses who cash pay cheques. AIUI they take 10% but that means whoever is cashing the cheque saves the taxman knowing about the money. Not 100% on this scam but I think thats how it works

 

When I employed someone I had to charge more, this was to cover ppe, holidays and national insurance/tax contributions. Over a 12 month period it added up to quite a lot which pushed me to the vat limit.

[likeitorlumpit]

When I employed someone I had to charge more, this was to cover ppe, holidays and national insurance/tax contributions. Over a 12 month period it added up to quite a lot which pushed me to the vat limit.

 

Understandable

That VAT limit starts to be broken once there are 2 of you on the firm. It's quite a shock. It does though push you to more commercial work so there are some benefits.

[Hodge]

Understandable

That VAT limit starts to be broken once there are 2 of you on the firm. It's quite a shock. It does though push you to more commercial work so there are some benefits.

 

I don't want commercial work though, my client base is 90% domestic. I don't want the hassle that comes with commercial work.

[likeitorlumpit]

I don't want commercial work though, my client base is 90% domestic. I don't want the hassle that comes with commercial work.

 

I get where you're coming from.

Sometimes it's better to stay smallish and local and know your customers. I get that totally.

For my part I find domestic customers more hassle. Commercial just ticks along. The hassle really came as the business grew especially past the 5 employees mark. All that RA crap.

[Samba]

No worries about the Hi-jack Hodge, I appreciate yours and everyone elses contributions to this hazey subject.

 

The reason why I started the discussion was because the guy I was working with for 3 days a week has just knocked down my rate for the 3 days as his accountant was making sure I got what I wanted as my day rate and was costing the employer way above what he should of been paying me, as he was paying me my day rate plus my tax and ni contributions.

 

He has now adjusted my rate to less as he is paying my tax etc for me. I was obviously getting a very good deal before, as he was paying me my day rate plus my contributions and now I will lose out. I never asked to be on the books but am willing to commit as he gives me a guaranteed 3 days a week.

 

I wanted to know if by being part time if I should get holiday, ppe etc? I do think that the CIS scheme should be implemented in arb as its such a hazey subject and its something I believe our industry representatives should be working towards as it would make all our lives easier (employers and subbies alike)