self-employment & sub-contracting

cath_holls

Hi I wonder if anyone can offer some advice please.

I am self-employed as a sole trader. I have a number of clients that I do jobsfor, but I have one that I work for on a monthly basis as a receptionist. I invoice this client monthly for hoursworked, and then pay my own NI and tax. The client has approached me with concerns that if they carry on usingme on a sub contracted basis that they will run into tax problems. As a solution they have offered to take me onas an employee on a reduced hourly rate.

This is something that I’ve not come across before, and Iwas under the impression that a business could subcontract someone indefinitely???
I prefer the flexibility of being self-employed and don’treally want to go on the pay roll unless necessary, but on the other hand I don’twant to lose them as a client if there are tax issues.

Please can someone shed some light on this as the best Ihave got from the tax office was 30 mins on hold x 2 and an address to write to?

Cheers

Cathy

Uncertain

The good news from your point of view is that getting this wrong is entirely the employer's problem and not yours!

The HMRC website has (well certainly used to have) an interactive guide to ascertain your employment status. You don't have to give your personal details. It is however slightly "titled" towards employment!

You would normally expect the hourly rate to be lower for an employee as you would of course get a minimum of 5.6 weeks paid holiday per year (pro rata) and at least statutory sick pay.

There is of course for and against.

PlutoinCapricorn

HMRC are reported to be cracking down on "false self employment". This can be where someone works regularly for the same company over a long period of time with no specified end date.

Some employers ask people to work for them on a self employed basis in order to avoid paying sick pay, holiday pay etc. The people who do the work are employees in all but name.

Do you charge around 1/3 more than an employee doing the same job would get? Being a consultant and coming in from time to time is one thing, but a reception position sounds like a regular commitment that is really employment.