redundancy - Self Employed - Fixed Term Contract

twentyfour11

the article states

"there are occasions when those who are self-employed for tax purposes may be classified as ‘workers’ for employment rights purposes".

Are you saying the article is right or wrong when it states the above?

yes or no answer is just needed.

notanewuser

You haven't answered the questions we've asked or given anywhere enough detail for us to know whether you are or aren't covered. Yes, it's possible that you are covered, but those of us who work in the field know that that is incredibly unlikely. Having known many many people who are convinced that they are self employed - just like you - discover that HMRC don't believe that to be true, I'm pointing out what could happen if HMRC decide the same for you.

Why post here if you've 2 experts advising you? Have they actually said you're definitely entitled? No, because they can't. Only HMRC can decide that and the odds simply aren't in your favour.

twentyfour11

1. Reason I posted was because I was seeking information


2. The advice I obtained was from the insolvency guy and confirmed from another person in this field and an accountant who has knowledge. This was after my first post.


3. You have not asked me any questions. If you want to fire away.


4. I note that you have know changed your mind and said that its possible I am covered. That's a fair comment.

notanewuser

twentyfour11 wrote: »

the article states

"there are occasions when those who are self-employed for tax purposes may be classified as ‘workers’ for employment rights purposes".

Are you saying the article is right or wrong when it states the above?

yes or no answer is just needed.

It says a great number of things, including:

"(specifically that you can decide when you will work and can accept work or turn it down; that your employer will only offer work when it is available) but you are not in business on your own account then it is likely you would be considered a Worker."

You haven't told us enough for us to work out whether you were self employed or not.

"You are likely to be self-employed if:

You determine how and when you do the work within reason (known as Master/Servant Relationship)
You can hire helpers or replacements for you if you are unable to do the work (also known as Substitution)
You pay your own tax and national insurance contributions on a self-employed basis (you complete a Self Assessment tax return)
You are contracted to provide services to the Client/Employer over a certain period of time for an agreed fee and are not integrated into the Company
You run your own business and take financial responsibility if it is successful or not, and provide the main items of equipment. You may work on your own premises.You may have several customers (employers) at one time (known as Economic Reality).
If you are self-employed your contract is called a ‘contract for service’.

If you are freelance, have you considered forming a Limited Company? When you decide to become self-employed you also have to decide what legal status your company should have – see our guide to the legal status of your company here.

See also our Guide to How to Make Sure your Contracts are IR35 proof.

There is no one single thing that completely determines your employment status

An Employment Tribunal will make a decision based on all the circumstances of the case to decide your status if there is a dispute between you and your Employer. There are four main categories they look at:

Control - Do you have the final say in how your business is run?; Can you choose whether to do the work yourself or can you send someone else to do it? Can you choose when and how you work (or does your employer tell you what to do and when to do it?). In Summer 2014 an employment tribunal considered what ‘control’ means – in the context of the old self-employment legislation - in the case of Oziegbe V HRMC. You can read the details here.
Integration - Are you responsible for hiring other people and setting their terms of employment if you need help? Are you excluded from your Employer’s internal organisational matters, corporate training, staff meetings? Are you exempt from having action taken against you using the company’s disciplinary procedures and have no access to their grievance procedures? Are you excluded from company benefits and perks? If for example you lead a team of employees of your Clients you may be integrated.
Mutuality of Obligation - Does the Employer offer work to you only if and when it is available? Can you decide when you will work and can you turn the work down that is offered? (or are both parties of a view that a contract of employment exists)? An important case in May 2014 went to the Employment Appeal Tribunal to decide if someone as a worker or an employee. In Saha v Viewpoint Field Services Ltd, Ms Saha worked as a telephone operator for a market research company. The application form she completed in 2006 asked for her availability for 3 separate shifts each day and she was required to commit to at least 2 shifts per week. During her work at Viewpoint the arrangement was that, each week, Ms Saha would e-mail her availability for the next week, but if the work was not available she did not work and she could cancel her availability after she had committed to work even if the work was available. The Company referred to her as an employee and she worked between 7-43 hours per week until her position was terminated in 2012. The Employment Tribunal however decided that she was not an employee so she could not pursue an unfair dismissal claim. The EAT agreed because there was no obligation to provide her with work, or for Ms Saha to take work – the essential ‘mutuality of obligation’ was not there.
Economic Reality - Are you responsible for meeting the losses of your employment as well as taking the profits? Are you responsible for correcting unsatisfactory work at your own expense? Do you have to submit an invoice to the company for them to pay you? Do you get a fixed payment for the job (including labour and tools/materials)? Do you provide the main items of equipment needed to do the job? Do you work for a range of different employers?
However, none of these on their own will decide your status on its own. One Judge has described it as ‘painting a picture’ of all the details and looking at the ‘picture’ from a distance.

If you answer:

Yes to all or most of these questions then it is more likely that you are self-employed.
No to all or most of these questions then you are likely to be an employee.
Yes to some (specifically that you can decide when you will work and can accept work or turn it down; that your employer will only offer work when it is available) but you are not in business on your own account then it is likely you would be considered a Worker.
These questions are a summary for guidance only and the Courts take a view of all of the tests – none will decide a case on it’s own – you should get advice from an expert if you are unsure.
The HMRC published a ‘Supervision, Direction or Control’ Guidance in March 2014 which you can see here.

A very important legal case in 2011 (Autoclenz Ltd v Belcher) has made it clear that the courts will focus on the actual reality of the working relationship (using the tests above) and not what the contractual documentation says. More details of the case are in our article here.

And another important case in 2012 (Stringfellow v Quashie) made it clear that the Courts find the most important factor in determining the employment relationship was the control that the Employer had over the individual, and Mutuality of Obligation was placed in a secondary position. This decision was overturned at the Court of Appeal in 2013. More details in our article here."


So, who made the decisions about who, what, when, where and how the services you provided were delivered?

notanewuser

notanewuser wrote: »

What was your contract for?

There's a question.

twentyfour11

1. what was the contact for?......to supply surveying services to the company.


2.
So, who made the decisions about who, what, when, where and how the services you provided were delivered?


The clients were the companies clients. The company told me who the clients were and what was required of me to do the work

notanewuser

twentyfour11 wrote: »

1. what was the contact for?......to supply surveying services to the company.


2.
So, who made the decisions about who, what, when, where and how the services you provided were delivered?


The clients were the companies clients. The company told me who the clients were and what was required of me to do the work

Could you send someone else? Did you supply your own tools? Did you have to ask to take leave or could you just tell them you'd be off? Did they give you the client contact details and let you make the appointments or were you told when and where to go? Could you choose where you worked/pick and choose jobs?

twentyfour11

Could you send someone else?


A - NO I was the only person doing this specific work




Did you supply your own tools?


A - I am a surveyor. I don't have tools unless you count a calculator which the firm provided


Did you have to ask to take leave or could you just tell them you'd be off?


A - The holiday arrangement was like any other member of staff for holidays.


Did they give you the client contact details and let you make the appointments or were you told when and where to go?


A - These were the companies clients. They told me the work which I had to undertake




Could you choose where you worked/pick and choose jobs?


A - NO they gave me the client list and I had to do work on these jobs.


Perhaps now you are beginning to understand why the insolvency expert holds the view he does.

notanewuser

twentyfour11 wrote: »

Could you send someone else?


A - NO I was the only person doing this specific work




Did you supply your own tools?


A - I am a surveyor. I don't have tools unless you count a calculator which the firm provided


Did you have to ask to take leave or could you just tell them you'd be off?


A - The holiday arrangement was like any other member of staff for holidays.


Did they give you the client contact details and let you make the appointments or were you told when and where to go?


A - These were the companies clients. They told me the work which I had to undertake




Could you choose where you worked/pick and choose jobs?


A - NO they gave me the client list and I had to do work on these jobs.


Perhaps now you are beginning to understand why the insolvency expert holds the view he does.

I absolutely do. Hope you can pay HMRC's Bill when it arrives.

notanewuser

Not just NI and income tax either. Any mileage you deducted as an expense to your employer's premises will have to have tax paid on it too along with other expenses you weren't entitled to claim as an employee.

You can't have it both ways.