Rules on self-employment

Jay974

My OH is a student and heard about a company who were offering a great deal on home workers. She applied to the company (Live Xchange) who sent her all the details and it seemed too good to be true. Essentially, she is a call centre worker who services incoming calls for their clients from home.

She has been given a contract of service and everything however, that is where the problem lies. She is not an employee of the company (or it's client) - she must register as self employed.

We have spoken to a few people who were on the same training courses as her and they all seem to be having problems with the IR as

• They will only be working for one company, not a variety of clients
• They get a regular salary instead of a fee for completion of contract
• They can get overtime/bonus pay
• The cannot substitute someone else to do their work for them

Having spoken to the company in question, they don't really have much of a clue on UK tax law since they're a Canadian company and their response is to "speak to the local tax office"

Is there anyone can provide some insight as to the legality of this situation as their attitude is no self employment = no job

Many thanks in anticipation

sandraroffey

you cannot be self employed and work for the same company all the time.

its the companys way of getting out of holiday pay, sick pay and all the other stuff you get by being EMPLOYED. its all very illegal and if it all goes pear shaped the self employed person is responsible. and who will pay the phone bill?????

the tax office has told you that you cannot be self employed and work for the same company all the time . a self employed person provides invoices, gets paid on production of a bill, and does their own book keeping. they do not get a salary - thats being employed. steer well clear!!!

Treading_Water

You may have a bit of a chance as the company involved is Canadian and presumably doesn't run a UK payroll.

Merlin_Accounts

Hi

You state that the contract is a contract of service - is this your own interpretation or what the company says it is? A contract of service is issued only to employees. A self employed person has a contract for services, something totally different.

The posts suggesting that working solely for one company makes it an employment are a bit misleading I'm afraid. What clearly does make it an employment is the fact that it is a contract of service.

HMRC will be aware of this company without a shadow of doubt.

Not on expert on Canadian employment tax rules but one would have thought they are similar to the UK, in principle at least. This is an area I would have to do a bit of digging on to refresh my memory on the precise rules but I'm sure there are others who contribute to this forum who may know this off by heart. Suffice it to say I think you will have to pay the tax yourself on this income, but not as a self employed person.

jimmo

As Merlin Accounts says a contract of service is a contract of employment. A contract for services is self employment.
I get the feeling that your OH will be regarded as an employee of the Canadian Company.
That’s where it becomes really tricky.
If her employer has a “presence” in the UK then her employer will have responsibility for operating PAYE against her wages. If her employer does not have a “presence” in the UK then she is likely to have to take care of her own tax and National Insurance liability using a modified form of PAYE.

She could find herself tied up in all sorts of red tape but the first question to address is how much will she be making a year?
If she is going to make £3, 4 or 5k pa and this is her only job then there is nothing to worry about because she will not be liable to tax or NI.
As things stand, the Canadian company advising her to register as self employed sounds technically incorrect but do you need to get involved?

PasturesNew

This organisation really acts as a facilitator, not an employer, as I understand it.

You are self-employed because you work for more than one company. So over time you build up clients.

They find the companies for you to do the work for; you then work for a variety of companies. Although I believe they have just one UK client at the moment (national/reputable utilities company).

The deal is: you become a certified home worker taking inbound calls. Then you can apply to their clients for work. The clients are drawn in because they know you have the right equipment, have been vetted, are up to a set standard.

You then, I believe, get paid from each of the clients based on inbound service calls you have taken.

My initial reaction to the deal is it's legit and when there are more clients it will be easier to see that it is self employed. They are new to recruiting in the UK (since about August) hence only having one major client so far (that I know of).

In answer to the initial four bullet points, my guess would be:
- it's only one at the moment, they're hoping/expecting to recruit a lot of major players to be clients, then the agents can work for a variety of the clients
- I thought the compensation was per call received, therefore each call is in effect a contract
- overtime/bonus pay might be for completing more than X hours or X calls in a given time period
- they cannot substitute somebody else because of the training required/undertaken

This is my quick estimation of how it works. I have no personal experience of the organisation.