Employment contract red flag?

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  • edited 24 November 2021 at 10:04PM
    lloyde92lloyde92 Forumite
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    edited 24 November 2021 at 10:04PM
    Savvy_Sue said:
    Sandtree said:
    lloyde92 said:
    Theres also no info about holiday/sick policy and they require me to pay my own tax on my salary.

    Then you arent going to be an employee
    THAT's the red flag. 
    Yep, a pretty big one.

    My worry is them cancelling the work just before I begin, in which case I wouldn’t have a leg to stand on I imagine…
  • SandtreeSandtree Forumite
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    lloyde92 said:
    Sandtree said:
    lloyde92 said:
    Theres also no info about holiday/sick policy and they require me to pay my own tax on my salary.

    Then you arent going to be an employee
    Yeah. It basically sounds like an ongoing contractor role (not quite what I thought). Will need to ask them a bunch of questions before I sign. Thanks for your input 
    As a long term contractor I personally don’t have an issue with not being an employee but monies have to reflect the lack of benefits and the risk. 

    My day rate has always been about 1/100th of what I’d expect my salary to be. As long as I can keep in work most the year then it’s easy to earn way more than as a perm. 

    The concern here is that it’s been done underhand by the sounds of it which would mean the monies are not marked up that much. 

    A lot to talk about! 
  • TELLIT01TELLIT01 Forumite
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    I've never been self-employed, but hasn't HMRC tightened up on whether a person should be classed as s/e or an employee/worker?
  • JillanddyJillanddy Forumite
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    TELLIT01 said:
    I've never been self-employed, but hasn't HMRC tightened up on whether a person should be classed as s/e or an employee/worker?
    Yes. As has the law. But that doesn't really help as plenty of employers ignore it and get away with it (often with the knowing or unknowing collusion of employees, to be fair). I think part of the problem is that the OP doesn't have any real understanding of employment status and contracts, and is (like many people do) making an assumption that when given a piece of paper that says it's an employment contract, that's what it is. In so many ways, it rarely is! Even the piece of paper that an employee gets isn't an employment contract - it's a statement of the main terms and conditions as required by law, and the contract is a much bigger thing. And if you aren't an employee anyway.....

    But I know you know that - I said it for the benefit of the OP (and others).
  • SandtreeSandtree Forumite
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    TELLIT01 said:
    I've never been self-employed, but hasn't HMRC tightened up on whether a person should be classed as s/e or an employee/worker?
    Not exactly, I assume you are talking about the changes to the IR35 legislation that came into effect this year for the private sector?

    IR35 has always said that if you look like an employee and smell like an employee then you should pay the tax and NI of an employee irrespective of what contracts may say or what legal structures you've put in place to avoid it. The changes havent adjusted that and so technically doesnt directly tighten the rules however what it does say is that now the client is liable for any underpayment of tax/NI if the person is operating as self employed or via a PSC LTD rather than the contractor themselves.

     mr/ms/mx one person band has often been comfortable saying they are outside IR35 and HMRC never had the resources to chase each individual for their potential £5,000 of under payment. Your RBS/PWC/Tesco's however are much more risk adverse and they have hundreds or thousands of contractors and so its worth going after a big company where you get 200x£5,000 if you find their determination is wrong rather than having to go after 200 people for £5,000 each.

    So a lot of companies offering contracting roles have either switched to FTC instead or are saying you must go through an appropriate umbrella company who'll take your day rate, take off employer costs and pay the rest as salary through PAYE and so you are paying all employee taxes/ni and so no risk to the client.

    HMRC have provided a tool (CREST) to help companies determine if someone is inside or outside and their are third party tools and insurance available too. As a rule of thumb if you are doing a business as usual role or if you have line management role etc you will be inside. If you are doing a one off discrete piece of work, can set your own ways of working (within industry standards/normal practices etc) and work where/when you like then you can get an outside determination. 
  • jobbingmusicianjobbingmusician Forumite, Board Guide
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    OP, are you allowed to subcontract your work, or do you have to perform it yourself?

    Is this the only employer you work for?

    It does sound to me as if they *SHOULD* be employing you.  What is this 1 page document headed, if anything?
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  • MarconMarcon Forumite
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    lloyde92 said:
    Sandtree said:
    lloyde92 said:
    Theres also no info about holiday/sick policy and they require me to pay my own tax on my salary.

    Then you arent going to be an employee
    Yeah. It basically sounds like an ongoing contractor role (not quite what I thought). Will need to ask them a bunch of questions before I sign. Thanks for your input 
    If this is a 'full time permanent job', the chances of HMRC agreeing you are self employed are pretty slim. Worth checking before you go any further: https://www.gov.uk/guidance/check-employment-status-for-tax
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