Employed or self employed?

cesami

I am in full time employment, I am about to engage in another part time job. I have been asked to either register as self employed or to be put on their payroll system.

I do not know which to do for the greater benefits - not to lose money, ease, etc?

I am struggling to get through to the tax office for any support.

Any advice guidence would be gratefully received.

Thanks in advance

CTA_2

cesami wrote: »

I am in full time employment, I am about to engage in another part time job. I have been asked to either register as self employed or to be put on their payroll system.

I do not know which to do for the greater benefits - not to lose money, ease, etc?

I am struggling to get through to the tax office for any support.

Any advice guidence would be gratefully received.

Thanks in advance

Who has asked you to register as self employed? The company you are going to be working for?

Have they offered you an employment contract (contract of services) as opposed to a contract for services?

Whether or not one option provides a greater benefit is neither here nor there, because the HMRC penalties on getting it wrong will outweigh it.

Please provide more details and I'll try to help as best I can.

System

This might give you some pointers to start with. As CTA indicates, its really important to get this right from the outset.

http://www.hmrc.gov.uk/employment-status/index.htm

"A worker's employment status, that is whether they are employed or self-employed, is not a matter of choice. Whether someone is employed or self-employed depends upon the terms and conditions of the relevant engagement. "

agrinnall

I would say that your default choice should be employed, unless you can both meet the self-employed criteria and the amount that you're being paid is enough to make it worth the additional hassle of self-employment.

CTA_2

agrinnall wrote: »

I would say that your default choice should be employed, unless you can both meet the self-employed criteria and the amount that you're being paid is enough to make it worth the additional hassle of self-employment.

But this isn't a choice one can make. The facts of the matter will determine employed/self employed status rather than simply "choosing" which status the OP wishes to enjoy.

chrismac1

The last post is the theory. In practice a succession of incompetent Budgets and other tweaks have utterly muddied the waters beyond any hope of repair in the next few years at any rate.

Hence it is pretty common to be in the OP's position, even more common to have "employers" insisting you go self-employed, form limited companies, and so on.

In my view unless the OP has a strong desire to be self-employed and complete tax returns every year, unless this part-time job is going to pay over £10k a year or enable unusually high levels of claimable slef-employment expenses he or she is nuts to volunteer to be self-employed if given the choice.

The worst that can happen is HMRC muck-up the tax codes and take too much or too little tax. Admittedly that happens with a far greater frequency than it would if a competent body was running the UK tax system.

But with self-employment there is lots to learn and lots of potentially hefty fines if it goes wrong. Either that or accountancy fees to pay for.

John_Pierpoint

What is the job?
There are some jobs where HMRC realises that it can be difficult for the worker and the "employer" to generate enough surplus value to be worth employing as an employee. The reasons for this are many but boil down to:
The job is customer facing and HMRC has not yet found a way to bossing about customers.
The demand is seasonal and varied.
The "employee" is expected to work variable antisocial hours on a "job and finish" basis that may or may not fit in with well meaning legislation like the 48 hour week.
Above all determined hard working "employees" can work 7 days a week trying to pull themselves up by their own bootstraps, while "lazy" ones with "health" issues cannot make minimum wage.

Anything involving driving Taxi - Car Hire - White van deliveries - HGV can fall into this category.

So someone can be expected to be self employed even though the "employer" generates everything needed for the job: Vehicle, fuel, repairs, radio, jobs, uniform and the administration down the the invoice that the self employed driver has to submit to get paid his commission.

So the choice for a lot of people not: do I want to be self employed? It is do I want to earn some money or rot on the dole?

The middle class equivalent, given access to the bank of mum & dad, is to be "an intern" and get paid no money at all.

Here you are, right back to Victorian times when parents had to purchase an apprenticeship to get their kids off their hands:

http://www.independent.co.uk/news/education/education-news/ftse-100-company-pearson-becomes-first-to-offer-its-own-degrees-8038728.html

http://www.trainingzone.co.uk/topic/strategy/pearson-launches-higher-education-college/178726

agrinnall

CTA wrote: »

But this isn't a choice one can make. The facts of the matter will determine employed/self employed status rather than simply "choosing" which status the OP wishes to enjoy.

I know what you're saying, but it's not the full story. If the OP has been given the option of working as an employee or as a contractor providing services through a service company then it is possible for a choice to be made (because as a contractor they are an employee, just not of the company providing the money). But it's only worth doing the latter if the money to be made is enough to justify it.

Nicola_Ed

Hi

Notwithstanding the technical arguments already highlighted - if the incomefrom your part time job is relatively small it might be better to “choose"to be an employee to avoid having to complete a self-assessment tax return as you would if you were self employed . Paying an accountant to complete this foryou is likely to cost more than any potential tax saving by “choosing” to be self-employed.

ceeforcat

You have been 'asked to to either register as self employed or to be put on their payroll system' - whoever has asked you does not have the authority to ask you to make that choice.

Will you

a) determine your hours of work,
b) provide your own equipment
c) invoice on headed notepaper.
d) be paid 'per job' and not weekly or monthly
e) have a separate business bank account
f) have no entitlement to annual leave, sickness or other employee benefits.
g) be free to engage in other work of your time and choosing

If you can say 'Yes' to the vast majority of these, you have a strong case for calling yourself 'self-employed'. Otherwise I would be classing you as an employee.

John_Pierpoint

What about the right of substitution ie on the day you don't want to turn up you send along your mum?