Self employed - notice period

Critically

Hi MSX posters.

I am deeply worried about my situation, I would like to outline that for you now.

I have no written contract.
According to them I am self-employed (I sort my own tax and NI)
According to law it looks like I am employed (They give me equipment and pay for travel and I feel they may be breaking the law here)
I have worked for them for a year.
I have been paid up to 3 weeks late on some occasions and it has rarely been on time.
I have been constantly put under massive amounts of pressure.
I am owed £2349.45 in bonuses according verbal conversatios which has been signed off by a 3rd party company to say I have completed the work.
I am scared of leaving due to the threat of being sued as the company is likely to fold anyway and I will inevitably be blamed for this if i leave.

The situation is I am sick to death of this and the attitude of the company and director, recently I have seen many dodgy goings on and have signed witness statements to back this up if things go sour as three of us do not agree with what was going on.

I wish to send a resignation letter tonight but I am worried I may be breaking the law as to employment notice.

Am I employed or self employed? the company says i'm self employed so does this mean I can leave with no notice due to the reasons above.

Or

Am I employed which the hmrc website seems to think I am? which means due to working beyond a month I legally have to give one week notice. I really do not wish to return as I have 2 interviews lined up one tomorrow and one on Tuesday which I will not be able to attend if I go into work.

I'm sorry if this is very confusing and really wish for some thoughts on what I should do and whether or not I am likely to get sued if the company folds.

Kindest Regards

Critically

Help!

HappyMJ

If you sort your own tax and NI then you must be invoicing the client and that is a big pointer to being self employed.

You don't resign from self employment you just cancel the contract and walk away...any bonuses you may get for completing the contract will not be paid to you so it may not be something you would be willing to do.

You really should get something in writing it's too late now but for future contracts always get something written down. You are offering your services and are in control so you write the contract...with legal advice if necessary.

There is no law stating a client does not provide the tools nd equipment for a contractor to do the required work. That's up to them but it is a big pointer towards being employed...but it isn't the only thing.

Clients do pay for contract workers travel time and mileage so there is nothing wrong there. They would do that with their own employed staff as well.

Critically

Thank you for the quick reply.

I have not invoiced the client . When I started working for the client I was employed but that quickly changed to self employed within weeks via their request.

I was told there was no need to invoice them and have not done so. I carry out the work for them when they tell me to do it and do what they require. They pay me a basic via bacs transfer and I was told to register with Hmrc as self employed and keep my receipts for petrol etc to claim back against tax. I was also keep a record of what they had paid me. I used the hmrc tax calculator to work out how much I ow and save that amount to pay when I file my tax return later this year.

This was all done with their guidance and I just feel like I have been screwed over.

Again thank you for your quick response

HappyMJ

Critically wrote: »

Thank you for the quick reply.

I have not invoiced the client . When I started working for the client I was employed but that quickly changed to self employed within weeks via their request.

I was told there was no need to invoice them and have not done so. I carry out the work for them when they tell me to do it and do what they require. They pay me a basic via bacs transfer and I was told to register with Hmrc as self employed and keep my receipts for petrol etc to claim back against tax. I was also keep a record of what they had paid me. I used the hmrc tax calculator to work out how much I ow and save that amount to pay when I file my tax return later this year.

This was all done with their guidance and I just feel like I have been screwed over.

Again thank you for your quick response

You need to get some professional advice. An employer can't say to an employee "sort your own tax out". You need to have been self employed from the beginning. There are some ways around it though. They need to have to sacked you or allowed you to resign where you get a P45 and then take you on as a consultant/contractor or whatever it is that you do....and you really must be invoicing them or at the very least know what is on the invoice they generate for themselves.

Petrol receipts aren't used for claiming tax back...you need a mileage diary detailing where you've been. When you started the journey, how many miles it was and the purpose of the journey.

How much do you charge the client per day? Or maybe I should ask how much do they pay you for each day of work that you do? Are you paid by the day or hour? Any overtime? Do you get paid if you are sick? Do you get paid on bank holidays when you don't work?

I can see why you don't like the arrangement...I wouldn't either. I'd be having some serious words with your client in regards to the work that is to be completed and consider walking away from it if they do not agree to your terms. Don't worry they won't sue you....they wouldn't dare do that with that arrangement in place.

Critically

I do not charge the client, I get paid a basic of £3200 per month, this includes any days off that I take although I have to give 2 months notice for these. I have not had a day off sick and so this has never been discussed. Bank holidays are included as I get the £3200 basic no matter how many hours I work.

I also get paid a bonus if another firm starts a contract with us of 5% of contract value.

I'm glad that you have said they would not sue me, I guess if they did it may open a legal can of worms for them.

So is there anything they could do to harm me financially?. Also do you have any idea how hmrc are going to re-act when I do my self assessment?

Thank you again

HappyMJ

The HMRC won't know anything about this set up unless you tell them and they (the employer) would be responsible for paying all the tax and NI on the payments they have made. They will (may) also be fined for avoiding paying Employers National Insurance contributions on the payments. You look so much like an employee I doubt there is anything that shows you are self employed at all. If you make a mistake on this job do you fix your own mistakes free of charge? It doesn't sound like it if you are paid a fixed amount per month no matter what.

Even when you say " if another firm starts a contract with us "...you aren't saying with them...you are saying with us. A genuine self employed person would not say us when talking about the client and themselves.

Critically

I liked that last paragraph spells it out really

If I make a mistake or loose a contract the 5% is deducted from my bonus but I still get paid the basic what ever happens.

Thank you for your thoughts they have been most helpful, I may even sleep tonight now. Well lets just see how this pans out as doctor pepper says.. "whats the worst that can happen?"

Welcome to the world of unemployment all be it for a couple of days.

Thanks again

Cyberman60

Well, I was a contractor for 15 years or so and had to invoice or I would not be paid. Your contract sounds like full-time employment to me and the company that employ you could be breaking the law. You should read up on IR35 which was the law brought in around 1997 to differentiate between true contractors and disguised employment to ensure proper payment of PAYE.

Majestic12

Cyberman60 wrote: »

Well, I was a contractor for 15 years or so and had to invoice or I would not be paid. Your contract sounds like full-time employment to me and the company that employ you could be breaking the law. You should read up on IR35 which was the law brought in around 1997 to differentiate between true contractors and disguised employment to ensure proper payment of PAYE.

IR35 applies to limited company directors who work for a client through their own company (personal service company). It does not apply to pure self employed folk.

Though I do agree that this situation does stink of employment, I highly sympathise with the OP.

getmore4less

Not sure which way you want to take this.

I would start by chasing the money owed.

one strategy is to retrospective invoice for all work and bonus.
some will be paid some outstanding this will establish a paper trail for any future small claims.

you could also push back being self employed
you also have the I wont be in today I am self employed to take time off when I want with email trail, they may not be so keen on establishing employee status items like you work when we say.

alternatively just get an HMRC investigation started.


Is this something you could set up on your own and start doing similar.