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Help! My employer wants me to go Self Employed
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# 1
lunaphase66
Old 14-10-2009, 12:41 PM
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Default Help! My employer wants me to go Self Employed

Yesterday my boss [MD & Owner] advised that due to 'the current economic situation', all staff were required to take a pro rata pay cut for six months beginning November pay packet....but they would need us to go Self Employed during that time too.

After my initial shock at the though of potentially losing up to £250 a month. It suddenly occured to me that whilst being SE, I would be at the company's mercy. I could lose my benefits, sick and holiday pay. Surely this could also mean that if at the end of the six month period, things had not picked up and the company had to let us all go, they could merely drop me like a hot potato. Being SE I would lose my right to redundancy?! I have been with them for 3.5yrs.

Please can anyone give me SE pros and cons advise about this matter. I am worried because I used to work for this boss at his previous company [with him for 5yrs] and watched him systematically and underhandedly sack people whilst completely covering himself and his company with no legal recriminations. Later he went on to merge and eventually sell his company, cr&ping on all of his remaining loyal staff.
I dont trust him one little bit!

Desperate of Reading
:-(
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# 2
TEDDYRUKSPIN
Old 14-10-2009, 12:52 PM
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I believe - need to be corrected, that if you go self employed, you will be first be made redundant. You will then obtain that 3.5 weeks of redundancy pay. May need to be fully corrected though.

You will lose all company entitlements but.............you will still have job. The company is doing this mainly because it is on their last legs. Some pay, better than none. You will also have to pay your own stamp too!
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# 3
jazzyman01
Old 14-10-2009, 2:34 PM
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If the owner wants you to do the same job but as self employed then it is effectively not a redundancy situation. Also, the inland revenue will see through this as not being self employed unless, of course, you work for other people etc.

If you and your colleagues agree to a temporary cut then I would expect it to be in writing and to have the condition that any holiday pay - for example - accrued to date is on your original pay and that if redundancy is required then it will be based on your old pay (including any notice pay).

With regard to redundancy pay, what you will be entitled to will depend on your age. Service under the age of 21 will get you 1/2 weeks pay from that to 41 1 weeks pay and over 41 1.5 weeks pay. The redundancy cap is £380 per week.
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# 4
Mr Thrifty
Old 20-10-2009, 4:51 PM
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Yuck. I had a similar situation. My experience:

1. Tax returns are a nightmare. Payments on account and all that stuff is HORRIBLE and best avoided. You'll probably totally lose track of what you're earning.
2. You won't be building up qualifying years for a second state pension whilst you are self employed.
3. Zero job security. If you have to, take up the self employed option, but get looking for a new job. It sounds like it's the first step on the ladder for them letting people go for good.
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# 5
luxor4t
Old 20-10-2009, 5:15 PM
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Quote:
Originally Posted by jazzyman01 View Post
.... Also, the inland revenue will see through this as not being self employed unless, of course, you work for other people etc.... snipped ....
'Self Employment' does depend on the kind of work you are doing. As has been said, some jobs just cannot be classed as self-employed for tax & NI etc, others are less easy to decide:
http://www.direct.gov.uk/en/Employme...nt/DG_10027916

HMRC (new name for Inland Revenue etc) have advisors called "Status Inspectors" who can help.
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# 6
1984ReturnsForReal
Old 20-10-2009, 5:45 PM
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Quote:
Originally Posted by luxor4t View Post
'Self Employment' does depend on the kind of work you are doing. As has been said, some jobs just cannot be classed as self-employed for tax & NI etc, others are less easy to decide:
http://www.direct.gov.uk/en/Employme...nt/DG_10027916

HMRC (new name for Inland Revenue etc) have advisors called "Status Inspectors" who can help.

As a vast majority of the people that read your gas & electricity meters are now self-employed you can pretty much count on it that either:

1: The "Status Inspectors" dont know what they are doing

or

2: The laws on self-employment are a farce.
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# 7
katsu
Old 20-10-2009, 7:11 PM
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Whilst we don't know what you do, it is unlikely that HMRC (income tax authority) would consider this a valid move as they are generally very suspicious when people go from employment to self employment to do the same activties for the same people. This could cause you income tax problems so take care.

If you do go down this route and it goes wrong you may still be able to take your employer to an employment tribunal as the tests under employment law (not tax) for being an employee are likely to still be met by you (doing all your work for this company, doing what they tell you, having to do the work yourself - not able to send someone else instead, etc).

In terms of your specific questions, your current company would not need to pay you sick, holiday or redundancy pay as a self employed person. Your post suggests your employer may want you to resign (at least on paper) to go self employed - be very careful not to do that without advice.

Call ACAS for free confidential employment advice (google ACAS for website and telno) or visit Citizens Advice.
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# 8
Cashwitch
Old 21-10-2009, 12:40 PM
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I would be very careful about proceeding without legal advice - talk to the Citizens Advice Bureau here or similar (eg ACAS) before doing anything, as the employers may be hoping you'll do this with no challenge, and you may forfeit rights as their employee into the bargain.
Get everything in writing, too, and whatever you do, don't rely on verbal discussion to agree/contest anything.I think that sadly, a lot of employers are extracting the proverbial at the moment to make savings where they can.
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