Employed by two companies

pollyanna24

My boss is starting up a new company and is looking into all the rules and regs about it. Apparently, I won't be able to work at the second company (I'm a secretary) due to confidentiality reasons.

He has mentioned that a way round this would be if I were to go self employed (like his accountant and computer guy). Is this true?

What are the possible drawbacks to me being self employed rather than PAYE?

Do I have to sort out all my own tax?

engineer_amy

I don't understand what your boss is getting at - there is no law preventing you from being employed by 2 companies (whether they are connected or not).
If in any normal course of events you were told that there could be confidentiality issues, that would seem more like an internal company policy rather than any law. But that gets blown out of the water by his statement that you could be self employed - as you would still have access to the confidential information whether you are employed or self employed!
Based on the info provided I don't think you would meet HMRC's tests for genuine self employment such as having more than one client, the ability to accept or refuse work, setting your own hours, who shoulders the risk, and whether you have control over how the work is done and right of substitution.
Your boss may just be trying to avoid paying employment related costs such as national insurance, sick pay etc.


To answer the other questions, yes you would have to register as self employed, complete annual self assessments and keep a portion of your earnings aside to pay any tax/NI liability.
Downsides are no sick pay, statutory maternity pay, holiday pay etc, but you would usually have a higher hourly rate than if you were on PAYE to compensate for this.

pollyanna24

engineer_amy wrote: »

I don't understand what your boss is getting at - there is no law preventing you from being employed by 2 companies (whether they are connected or not).
If in any normal course of events you were told that there could be confidentiality issues, that would seem more like an internal company policy rather than any law. But that gets blown out of the water by his statement that you could be self employed - as you would still have access to the confidential information whether you are employed or self employed!
Based on the info provided I don't think you would meet HMRC's tests for genuine self employment such as having more than one client, the ability to accept or refuse work, setting your own hours, who shoulders the risk, and whether you have control over how the work is done and right of substitution.
Your boss may just be trying to avoid paying employment related costs such as national insurance, sick pay etc.


To answer the other questions, yes you would have to register as self employed, complete annual self assessments and keep a portion of your earnings aside to pay any tax/NI liability.
Downsides are no sick pay, statutory maternity pay, holiday pay etc, but you would usually have a higher hourly rate than if you were on PAYE to compensate for this.

Thanks for that. I don't think he thought it through properly maybe.

It's to do with solicitors rules I think.

He has told them everything will be separate between the different companies, including staff. But he still intends to keep the freelance bookkeeper and the guy who comes in to help with the computers working for both companies.

I simply don't know enough about the rules, so I just took him at his word that I wouldn't be able to work for this new company (they will be in the same building, but on separate floors).

engineer_amy

OK, understandable possibly at a solicitors where there may be a requirement for separation due to legal cases, connected parties, same solicitor not acting for both parties etc. Chinese walls I think is the term used. But it still stands that whether you were employed or self employed by both companies, as a secretary, you would still have the same knowledge of this confidential info.


The accountant and IT are probably genuinely self employed if they don't work there full time and have other clients. The confidentiality issue wouldn't really apply to them as they wouldn't be involved in dealing with the actual cases/client information between the two companies.

pollyanna24

engineer_amy wrote: »

OK, understandable possibly at a solicitors where there may be a requirement for separation due to legal cases, connected parties, same solicitor not acting for both parties etc. Chinese walls I think is the term used. But it still stands that whether you were employed or self employed by both companies, as a secretary, you would still have the same knowledge of this confidential info.


The accountant and IT are probably genuinely self employed if they don't work there full time and have other clients. The confidentiality issue wouldn't really apply to them as they wouldn't be involved in dealing with the actual cases/client information between the two companies.

Hmm, yes, it's all new and things might change, but I don't quite get it either. The solicitor will be working for both companies, but obviously can't be on opposite sides.

I just wonder why he's able to work for both and not me, when I'm just support staff.

However, it's what he's been told, so I guess I will just have to go with it. Wouldn't mind working for the new company as it would mean more to do and would mean he wouldn't need to employ another secretary.

sangie595

engineer_amy wrote: »

OK, understandable possibly at a solicitors where there may be a requirement for separation due to legal cases, connected parties, same solicitor not acting for both parties etc. Chinese walls I think is the term used. But it still stands that whether you were employed or self employed by both companies, as a secretary, you would still have the same knowledge of this confidential info.


The accountant and IT are probably genuinely self employed if they don't work there full time and have other clients. The confidentiality issue wouldn't really apply to them as they wouldn't be involved in dealing with the actual cases/client information between the two companies.

I agree, but I am fascinated how the rules wouldn't apply if you are self-employed. That sounds like twaddle to me. Far more likely that, as a solicitor, he knows you get no employment rights if you are self-employed.

engineer_amy

sangie595 wrote: »

I agree, but I am fascinated how the rules wouldn't apply if you are self-employed. That sounds like twaddle to me. Far more likely that, as a solicitor, he knows you get no employment rights if you are self-employed.

The cynic in me had that same thought, less rights, or at the very least trying to do something under the radar