How can you be a self-employed temp paying Class 1 National Insurance contributions

tobiascurious

I've been offered a temp job. The contract states I will be a "self-employed worker" but deductions for income tax and Class 1 NI contributions will be made.

This seems to be common practice but I don't understand how I can be self-employed if those deductions are being made by the agency?

LittleVoice

It is a legal requirement.
Agency workers can work on a contract for services rather than a contract of service and thus are considered to be self-employed. However employment agencies are required to deduct tax and NI - and they also pay employers NI.

(Some agencies operate as an employment business and do employ their temps on an employee basis but that is quite rare.)

tobiascurious

Thanks LittleVoice

I would have thought being self-employed has implications:

- Having to pay Class 2 National Insurance contributions as well
- Declaring on car insurance (and other insurance) that you are self-employed
- Being able to claim tax relief on certain expenses (even if the agency doesn't reimburse the expenses), assuming that the office where you're temping isn't considered your permanent place of work?

LittleVoice

Sadly, in some respects, normal self-employment practice does not apply.
(At least you don't have to fill in a tax return unless there are other reasons for doing so.)
You pay Class 1 contributions (as does the agency as "employer")
Car insurance would only be affected if you were using it in your business - and if you use your own car and get reimbursed as an employee you still need to tell the insurer
No tax relief on your travel to work, communications, stationery, etc. I believe you could still claim for tools of the trade if you needed to provide your own - but that is the case for employees too.