Cafe employer wants invoice

fossil

One more thing... They are very flexible with hours and work out shifts that suit him each week. When he goes back to finish studies in September, he will do far fewer hours. Does that change anything? (Just want to make sure we get it right if he is going to turn down the invoicing "offer". Would they be breaking the law doing it that way?)

sammyjammy

He needs to be PAYE, he always should have been, it doesn't matter what hours he does, he won't pay more tax this way, even working more hours over the summer he is unlikely to pay any tax over the year (anything he pays now he will likely be due a refund at end of tax year)

LittleVoice

fossil said:

Thank you for replies so far on this.

Employer has clarified. Said he can either invoice, or go through PAYE system, but will end up with less money if PAYE. 
My understanding is that if self employed (invoicing) he will have to pay NI but only tax if goes above threshold at end of year. I don't know much about PAYE. Would he be taxed at standard rate, then claim back if too much has been taken:? Does employer have to contribute anything extra? He is on minimum wage for his age.

Employer also suggested hours will be more transparent if done through PAYE. However, I did check on here recently, and apparently everything is above board for his age/student status, so there is nothing for us to worry about there. 

If anyone can advise on this or suggest any pitfalls, that would be useful. I wonder if he is better protected with PAYE and if he/employer are actually allowed to opt out like this.
Many thanks again if you can help. 

If the employer (and clearly this is an employment not self-employment situation) operates PAYE correctly and while your son is working for this employer only, he should have completed a New Starter form (previously there was a similar form referenced as a P46) and completed the section which indicates he is not employed elsewhere.  If your son finds additional work he should consider whether it would be better to split his tax code between the two employers. 

fossil

Ok thank you very much for the new replies too. He knows enough now to feel confident speaking to them. 

Doshwaster

I'm sure HMRC would take a dim view of a cafe owner using "self-employed" staff. He has an employer and he is is employed by them. He's not a freelance contractor unless he's a master chef who works for multiple clients.
Check the following HMRC definitions of being self-employed and I would bet that most don't apply
https://www.gov.uk/employment-status/selfemployed-contractor