self employed or PAYE

clearingout

Just a quick query - for a friend, detail might be sketchy...

Offered a job at 50 miles from home (so 100 mile round trip) for 2 days a week. Fits in with current commitments, good opportunity, would like to take it save for the fact it's further away than she would like to travel.

Job offered on either a PAYE or self employed basis. Per hour offered @ £11 for PAYE and £15 for self employed. She is wondering if self employed, could she off-set the costs of travel to and from work against any tax she might have to pay? This would seem to make her better off than taking the lower rate - recognising that there is hassle in doing accounts, keeping receipts, not being paid if ill but that it offers some flexibility as she's a single mum with young-ish children.

Any thoughts?

InsideInsurance

Both she and her "employer" need to be careful as there really shouldn't be a "choice" over the fact of if you are an employee (PAYE) or not and HMRC will make its own decision irrespective of what any arrangements between the two parties may be.

As a self employed person she would claim that her perm place of work is her home and so travel to her clients location would be a business expense, she would be able to do up until the point she knows the contract will last more than 2 years at which point she can no longer claim the client site a temporary work address. She can likewise claim reasonable subsistance costs whilst working from a temporary location (normally £10 a day for lunch)

Dont be mistaken into thinking there is more flexibility however, arguably there is less. There will still be a contract between them, just not a contract of employment, and that can still state when and where she needs to be. Where as if she breached an employment contract they would have to follow a disciplinary process etc before getting rid of her as a contractor they can get rid of her with notice at any point without needing any justification and without notice if they want to claim breach of contract.

clearingout

many thanks. The contract is to the end of the year so comes in at under 2 years so that is fine. Interesting comment about either/or as it's a local authority!

thanks again. Useful information.

BoGoF

Don't take this personally Inside Insurance but some of your reply is plain wrong. There is no 2 year rule for the self-employed.

You are right in saying that an individual cannot choose to be employed or self-employed, it is determined by the facts.

The facts here are the person travels to a place of work and carries out the work at the 'employers' premises and clearly looks like an employer/employee relationship. If the authority were to have an audit they would be in trouble.

CKhalvashi

clearingout wrote: »

many thanks. The contract is to the end of the year so comes in at under 2 years so that is fine. Interesting comment about either/or as it's a local authority!

thanks again. Useful information.

This is the case with a lot of temp Social Care posts, where the distinction is that there is no real ‘perm’ place of work in the technical sense, however I am not aware of any legislation on this.

Essex CC for example are offering more as Ltd rate than PAYE on Social Work posts?!

leveller2911

I can only comment on being self employed in the Construction industry and HMRC say a self employed contractor needs to show they are taking a financial risk, ie quoting for work, buying materials , not working set hours each day determined by the "employer" and your not allowed to work for the same employer all year round.

clearingout

thanks again. It's actually an agency post working for a local authority which I guess makes a difference to the self-employed/PAYE situation? any other thoughts?

clearingout

also, before I forget, it is quite a specialised role with a view to trouble shooting a situation, setting up systems and then leaving them to it a few months later. Desk job, not social care, although would be a certain amount of getting out and about to see other organisations. Easily a role that could be considered 'consultancy'. Does that make any difference to the travel costs?

Role is one my friend would like to take but the travel costs vs. childcare costs vs. time travelling as a single mum with little back up if she gets stuck in traffic (would mean commuting into a major city) make it one she needs to consider carefully. If she's not able to claim back travel costs I suspect it's a no-goer. Many thanks for your comments so far.