Employed and self-employed with the same firm?

Steel_2

I have recently gone down to part-time hours with my company due to restructuring, and to make up my income have gone back to freelancing for the rest of the working hours of the week.

My paid employment and freelance work are two completely different jobs with different skills sets. After nearly a month I've picked up two freelance clients and am quite happy with the way things are progressing. Before I joined the company in my current role I had done this particular type of freelance work for a living for many years, and am extremely experienced.

During the consultation process for my hours reduction it was mentioned in passing that PR and Comms department in the company may have some freelance work available. I want to make it clear it was not offered as an incentive, more as a way to soften the blow. It was understood that whether or not I accepted the offer of part-time work or decided to leave the company, the freelance work would be there regardless. To be honest it was quite a comfort to have that knowledge in the background.

Fast forward to today - I completed my first freelance job for the company and submitted my invoice, only to find out that I am not allowed to be PAYE and consultant at the same time and will not be allowed to in the future. The PR and Comms manager is pretty angry as she was told I could be a resource for her, and I'm very confused.

Any idea about being a PAYE and consultant at the same time?

Is it not allowed - even when the roles are completely different - and why?

Horace

If you are working for a company then you are an employee and are classed as such by the HMRC. You cannot be a self employed person with the same company because the company is viewed as your sole employer. You should therefore be on the payroll for both jobs even though they are in different departments.

As a freelance self employed person you would be free to work for other employers and would be able to invoice them for the hours that you worked, you would then sort out your own tax and NI. Tax being paid on your profits and you would need to complete Self Assessments annually for the HMRC.

Notmyrealname

For the same company, not a chance. HMRC would have a fit. They would quite rightly ask why this wasn't done as overtime and the company would have a hard time proving it wasn't done to evade employers NI.

Steel_2

Thanks guys. I understand the rationale and under the current circumstances think it sucks.

The amount of work available is not enough nor guaranteed to be regular to justify an employed job (it equates to about 6-12 hours a month or two large articles), and there is no overtime at the company. Never has been, never will be.

The company is in financial dire straits and has had to rationalise about a third of its workforce. The salaries have been set by a finance committee for the year, as have the departmental budgets which have been slashed too. There is no wiggle room.

So it looks like the work will have to be done by a freelancer under the small PR budget, but it won't be done by me, which is actually the bit that sucks - there's work sitting there and I can't do it, no matter how much I want to.

Notmyrealname

The only reason you can't do it is purely down to the company you work for and the asinine way they've decided to run it. There is nothing stopping them creating a second job on a zero hours contract for you or department X seconding you from department Y and transferring the pay from dept X's budget to dept Y.