Cafe work - employed or self-employed?

PaulShopper

A friend has his own translation business and is set up on a self-employed basis for this. He is being offered some hours working in a cafe which is a useful top up to his income. The hours will vary and he will have the ability to agree when he goes in and when he doesn't to fit around his main business. Is he allowed to invoice the cafe and put the income through his business? Or must he take an employed position?

Is he does it self-employed he is being offered £7.50-an-hour compared to £6.10 employed. Which is best taking into account holiday and other benefits of employment?

If he does it employed, how complicated does this make his end of year tax return?

Thanks for any advice.

KiKi

PaulShopper wrote: »

A friend has his own translation business and is set up on a self-employed basis for this. He is being offered some hours working in a cafe which is a useful top up to his income. The hours will vary and he will have the ability to agree when he goes in and when he doesn't to fit around his main business. Is he allowed to invoice the cafe and put the income through his business? Or must he take an employed position?

HMRC decide what is an 'employed' position, and what is 'self employed'. There are criteria on the website. You could argue it's self employed, as it wouldn't be his only 'client' and he can choose which hours to do - but I think it's very tenuous and I expect HMRC would see it as an employed job. On that basis alone (so HMRC don't descend upon him) I'd go employed, on the condition that his hours are flexible and he can choose them (could go onto a zero hours contract - although that means his employer doesn't have to give him ANY hours at all...although sounds that what the self employment arrangement would be anyway).

Is he does it self-employed he is being offered £7.50-an-hour compared to £6.10 employed. Which is best taking into account holiday and other benefits of employment?

Probably self employed as he could claim expenses to travel to the cafe. However, I'd still go employed as he'd get no annual leave, no SSP if sick, no employment protection if self employed. And absolutely no guarantee of work. Plus I don't think HMRC would see this as self employed work anyway.

If he does it employed, how complicated does this make his end of year tax return?

Not at all - there's a section for employed work, and one for self employed. HMRC will do all the calculations.

HTH
KiKi

PaulShopper

Thanks Kiki, I'll tell him employed is the way to go.

KiKi

You're welcome.

KiKi

orangeslimes

KiKi wrote: »

HMRC decide what is an 'employed' position, and what is 'self employed'. There are criteria on the website. You could argue it's self employed, as it wouldn't be his only 'client' and he can choose which hours to do - but I think it's very tenuous and I expect HMRC would see it as an employed job. On that basis alone (so HMRC don't descend upon him) I'd go employed, on the condition that his hours are flexible and he can choose them (could go onto a zero hours contract - although that means his employer doesn't have to give him ANY hours at all...although sounds that what the self employment arrangement would be anyway).




Probably self employed as he could claim expenses to travel to the cafe. However, I'd still go employed as he'd get no annual leave, no SSP if sick, no employment protection if self employed. And absolutely no guarantee of work. Plus I don't think HMRC would see this as self employed work anyway.

It's very unlikely that he can claim expenses to travel there.

And it doesn't make filling in form difficult - all that's needed are the numbers from P60/P45

HappyMJ

orangeslimes wrote: »

It's very unlikely that he can claim expenses to travel there.

And it doesn't make filling in form difficult - all that's needed are the numbers from P60/P45

If he took the contract on as self employed he can claim the costs of travelling to work on the clients site. He wouldn't get P60/P45's as self employed as he would be responsible for his own taxes.

I would always go self employed but being a "worker" in a cafe is pushing the lmits of the definition of self employed. If he was the manager of the cafe taking a few risks such as taking a percentage of any takings during his hours of work less any expenses so he could potentially make a loss then he could be self employed. If he could decide with the owners agreement that he could take on his own staff and even could leave the premises in charge on someone he chose then that is another pointer to being self employed.

persa

HappyMJ wrote: »

If he took the contract on as self employed he can claim the costs of travelling to work on the clients site. He wouldn't get P60/P45's as self employed as he would be responsible for his own taxes.

I would always go self employed but being a "worker" in a cafe is pushing the lmits of the definition of self employed. If he was the manager of the cafe taking a few risks such as taking a percentage of any takings during his hours of work less any expenses so he could potentially make a loss then he could be self employed. If he could decide with the owners agreement that he could take on his own staff and even could leave the premises in charge on someone he chose then that is another pointer to being self employed.

I can't remember the case off the top of my head, but if you can appoint a substitute but don't actually ever do so in practice, HMRC disregard that as an indicator of self employment.

They look at all the facts - what you can and can't do, together with what actually happens.

People who work in cafes are generally employees and they normally have a degree of flexibility - the option to sign up for extra shifts, trade shifts, not come in for a few weeks because they have exams/other important things to do, etc. Zero hour contracts are also not unusual.

Sending invoices is a weak indicator of self employment as anyone chancing their luck with HMRC will do this, not just the genuinely self employed.

I would suggest the OP's friend will be an employee in this case and it's not worth trying to prove to HMRC otherwise.

PaulShopper

Thanks for all the comments. Yep, employed it is.