Employed or Self Employed?

chris_spackman

Have been to see the Status Officer and used the ESI on the internet but can't seem to get anywhere.

I send cleaners round to peoples homes and:

I have no control over what work is done or how it is carried out. The customer decides what is to be done and tells the cleaner.

I do not provide and materials for the work

The customers pay me and i pay the cleaner.

I have no control over the cleaner as in she decides if she wants to do any other work for me

The ESI says that the cleaner is self employed but the Status Officer said that she could well be classed as employed by me but she may not.....do the HMRC want to help or do they let you get on with it then get you for not doing it in the right way?

Horace

chris_spackman wrote: »

Have been to see the Status Officer and used the ESI on the internet but can't seem to get anywhere.

I send cleaners round to peoples homes and:

I have no control over what work is done or how it is carried out. The customer decides what is to be done and tells the cleaner.

I do not provide and materials for the work

The customers pay me and i pay the cleaner.

I have no control over the cleaner as in she decides if she wants to do any other work for me

The ESI says that the cleaner is self employed but the Status Officer said that she could well be classed as employed by me but she may not.....do the HMRC want to help or do they let you get on with it then get you for not doing it in the right way?

You could ring the HMRC for clarification, they are friendly and tend not to bite only if things are left to slide will they bite.

If you send the cleaner to work for someone and that someone pays you and you then pay the cleaner - the cleaner is your employee, do you pay her tax and NI, if so then she is your employee, if not and she pays this herself then she is self employed but if she is self employed there is nothing to stop her cutting out the middle man which is you and working directly for the customer. Hope this isnt confusing

Basically if you pay her and pay her NI and tax then she is your employee.

chris_spackman

She does have a few customers of her own and yes she could approach my customers if she wanted but then we would sort out a payment for that.

fengirl_2

Having been to see the Staus Officer, its not a lot of good for them to leave you hanging. Did they say why they wouldnt give you a written ruling?

Pennywise

fengirl wrote: »

Having been to see the Staus Officer, its not a lot of good for them to leave you hanging. Did they say why they wouldnt give you a written ruling?

This is one of the many reasons why I never recommend my clients ask the status officer. Not only are you putting your head above the parapet (like asking Turkeys to vote for christmas), it is almost impossible to get a definitive "yes" or "no" from them as even if you get a written response, it is usually surrounding by the usual meaningless weasel-words so beloved of politicians and public sector workers and termed such that if they leave the door open for them to change their decision later if there is even the slightest change in circumstance. My advice is always to talk to a contract/employment law specialist who can draw up a proper "business to business" contract for services and can advise on the necessary changes to the working practices which remove all doubt. HMRC status inspectors will always err on the side of it being employment - so for middle-ground cases, it is pointless asking them as they'll say its employment, whereas a proper specialist (and ultimately the tribunals etc) would probably decide it is self employment - just look at IR35 which is based on Status - HMRC have lost virtually all (and at least 90%) of cases where their status inspectors make the wrong call. You are looking at spending a few hundred pounds on a specialist to keep you out of it being employment - thus saving you potentially thousands of pounds in taxes and NICs if you just roll over and accept the status inspector's ruling (or lack of ruling).

chris_spackman

The Status Officer said that there was nor real YES or NO to being employed or Self Employed. I showed her the ESI print outs i did and all she did was say 'well that question could be yes or no and i would not want to advise as to the status but i would lean towards saying the girl who works for you is employed'

I did put to the officer that i have no control of the cleaner, i can't pull her from one job to the next, the cleaner can get someone else in to do the work if needed, i pay her a set amount per job on invoice from her, the cleaner can say yes or no to anyother work,the customer decides how many hours the cleaner does and if the cleaner wanted to she could take the customers on after we have sorted out payment for such an instance and that the cleaner has 3 other clients of her own.

Even after all this she said i would be the employer!!

Savvy_Sue

Is it just the one cleaner you may or may not be employing?

If it's more than one, are you in danger of running an employment agency, which is a whole other bunch of legislation ...

chris_spackman

This country seems to be so anti 'get out there and do........'

No, i have just the one who i use but i would like to take more on.

As Brown and most others say they want business to thrive but with so much red tape etc chucked in your way i'm sure it does make people think long and hard about it.

I do most of the work myself but if i can't do it iwill for example get a different cleaner in to do it as i have right to substitute.

With regards to employment agency how would they determine one to be one? My understanding of an employment agency is that they are asked by companies to supply them with workers in return for payment and a 'bonus' after so many months when they take them on.

Savvy_Sue

If you google employment agencies regulations the first two links are .gov.uk sites so should tell you all you need to know and more ...

I am sure you could be an employment agency without any intention to place people permanently.

pennypitstop_2

It does sound like agency work... which can be done under self-employment as far as I know, as I have worked this way for many years and our accountants and my tax office don't seem to have a problem with it.

I suggest that you draw up a contract for the girl you refer to work with your clients, and any other staff members you may have in the future, specifying that the work they do is accepted by them on a freelance basis and clarifying that they are responsible for their own tax and national insurance payments.

From my own experience, this should be sufficient... unless of course, the person accepting the contract works ONLY for you and does not have any other jobs! Then, I would expect the tax office to query it! But for cleaning I should image it would be part-time hours anyway.

I hope that helps. I'm not a legal expert though!

Penny