proof of self employment

ali_t66

Hello
I'm fairly new to this board but have a question and wondered if anyone could help. At the beginning of the year I regsitered as self employed. I work as a sports coach for a local school and the understanding we had (verbal) was that I would supply the coaching, invoice them and they would pay me. I have just submitted my first invoice and the school are now telling me that unless I provide proof of my self employed status they will not pay me. Apparently they are worried about being liable for PAYE and NI if I fail to declare my earnings. I have contacted the IR S/E helpline who said there is no obligation for me to provide any proof but wondered whether anyone may be able to suggest something I could use to satisfy the school as I am hoping to do more work for other schools and don't want to keep coming up against the same problem.

Thanks


Ali

larmy16

ali_t66 wrote:

Hello
I'm fairly new to this board but have a question and wondered if anyone could help. At the beginning of the year I regsitered as self employed. I work as a sports coach for a local school and the understanding we had (verbal) was that I would supply the coaching, invoice them and they would pay me. I have just submitted my first invoice and the school are now telling me that unless I provide proof of my self employed status they will not pay me. Apparently they are worried about being liable for PAYE and NI if I fail to declare my earnings. I have contacted the IR S/E helpline who said there is no obligation for me to provide any proof but wondered whether anyone may be able to suggest something I could use to satisfy the school as I am hoping to do more work for other schools and don't want to keep coming up against the same problem.

Thanks


Ali

Maybe if you visited the Inland Revenue they could give you some piece of paper confirming you are registered self employed? I have found them to be most helpful. I am self employed like you but have never come up against this.

WHA

It sounds as if they are employing you and that you aren't self employed for that work at all. You have agreed to work a few hours - that is casual employment, not self employment. You are having trouble providing evidence that you are self employed, probably because you may not be.

There are many factors which determine whether you are self employed - such as having your own insurance (if things go wrong), providing your own equipment or premises, the number of customers you have, whether you have to provide the service in person or whether you have the right to send someone else in your place, etc. etc. Have you a contract for services between yourself and the school or a contract of employment?

I think what has happened is that whoever at the school agreed to give you a few hours work is not properly aware as to how employment versus self employment works and has promised something that can't be delivered. Now that it has come to an invoice and payment request, it has gone to their admin/accounts department who have picked up (quite rightly) the problem.

So, you have to think why you believe you are self employed and what ways you can prove that. Sadly, a letter from HMRC is not going to happen - they may write to say that you have registered as self employed, but certainly won't commit themselves to saying that this particular engagement is one of self employement - the school is hardly likely to accept it. Just having several casual or part time jobs does not make someone self employed - to be self employed, you have to fall within HMRC's definition of self employment which means you must be "in business" and take the risks and rewards of business.

Normal proofs of self employment, generally accepted by public bodies are:- VAT registration certificate or business insurance certificate or proof of a business bank account or invoices from business suppliers - failing that, you could hope they'd accept less formal proof, such as a Yellow Pages advert, sight of your website, business brochure, etc.

The problem is that as the customer/employer, they have to satisfy themselves that you are truly self employed, otherwise they run the risk of having to pay your tax and national insurance, and their employers national insurance, possibly several years away, when you have disappeared into the sunset. That is why employers are cautious and more inclined to pay you as an employee if they are in doubt. Worse still, is that schools, colleges and universities usually pay casual teachers/lecturers etc as casual employees so I think you face an uphill struggle to get them to pay you as self employed.

Why not just accept being paid as an employee - if its just a few hours, there won't probably be much difference either way as regards your tax etc.

ali_t66

Hi WHA,

thanks for your reply. I have registered as self employed on IR advice and also completed a small earnings exemption cert. Coaching is not my main job as I am also employed and pay NI. I looked at the IR guidance and believe I am self employed because I decide who I work for and indeed work for several different people. I provide all my own equipment and if I am not available I arrange for another coach to take the session and pay them out of my fee. I decide when, where and how I will provide the services and if for instance the weather is bad it is my decision to call the session off and no one elses. I am a member of a professional body and have private insurance arranged through them. I am not registered for VAT because my turnover is less than £60k. I also have business cards and place advertisements in the local papers. I thought about writing out a "To whom it may concern" letter detailing the services I provide and stating that I will be responsible for tax and NI and wondered if this would suffice? What do you think?

ukbill69

As long as the school set you up as a contractor then its up to you the person that gets paid the money to pay your NI and tax.