Do I need to register as self-employed?

RainbowLaura

I currently earn £6000 per year as a PAYE employee.

I now have an opportunity to do some flexible work under an acquaintance of mine, earning approx. £4000 per year.  I would not be on any payroll or have paid holiday etc, and would simply invoice her for my hours worked at the end of each month (which would vary a little bit).  She is a self-employed cleaner and I would be using her equipment.  It seems that she would be an intermediary between myself and the end client, for whom I would be doing the cleaning. 

I've been on the HMRC website to check whether I would need to register as self-employed, and the definitions have left me a little bit confused.  It says:

You need to set up a business if you ‘trade’ in goods or services.  You’re likely to be trading if you:

• sell regularly to make a profit
• make items to sell for profit
• sell items on a regular basis, either online, at car boot sales or through classified adverts
• earn commission from selling goods for other people
• are paid for a service you provide

But the next page asks:

You’re an off-payroll worker (also sometimes called a contractor) if you provide services to a client through an intermediary such as:

• your own limited company
• a partnership
• a personal service company
• an individual

If I click Yes to the self-employed option, I have to file for self-employment.  If I click No, but say that I am an off-payroll worker, it says I don't need to fill in a self-assessment form at all.

How do I know which I am?!

Just to add, I earn about £2000 per year in savings interest + £500 from delivering booklets.
I've never worried about the booklets, as it's within my £1000 "trading allowance".  The savings should be interest free because of how far below the personal allowance threshold I've been for the last few years. But if I become self-employed, I'm thinking that these things would become relevant as well...  Also marriage tax allowance which my husband claims.  Perhaps I could just be really careful not to go near the £12,570* cutoff between my two jobs?

Any advice much appreciated!

*£11,310 considering marriage allowance, as pointed out by another poster

Dazed_and_C0nfused

If you claim not to be self employed then who is the intermediary?

RainbowLaura

Dazed_and_C0nfused said:

If you claim not to be self employed then who is the intermediary?

Surely my acquaintance, who is the one directly paying me?  She bills the client and then she pays me a (majority) cut.

RainbowLaura

I was also sent an offer letter containing the following paragraph:

The position is based on a six week shadowing period, paid at £12 per hour, initially for six hours per week. As discussed, you will invoice me for your hours worked on the last working day of each month.  After this six week shadowing period, we can discuss a more permanent agreement with an employment contract.

Hence my confusion!

sheramber

tax allowance which my husband claims.  Perhaps I could just be really careful not to go near the £12,570 cutoff between my two jobs?

If you mean that you have transferred some of your personal allowance to your husband then you do not have £12,570 personal allowance

RainbowLaura

sheramber said:

tax allowance which my husband claims.  Perhaps I could just be really careful not to go near the £12,570 cutoff between my two jobs?

If you mean that you have transferred some of your personal allowance to your husband then you do not have £12,570 personal allowance

Yes good point - I have £11,310!

Savvy_Sue

RainbowLaura said:

I was also sent an offer letter containing the following paragraph:

The position is based on a six week shadowing period, paid at £12 per hour, initially for six hours per week. As discussed, you will invoice me for your hours worked on the last working day of each month.  After this six week shadowing period, we can discuss a more permanent agreement with an employment contract.

Hence my confusion!

The way I read this, after an initial trial, she may offer you regular employment, and I'd talk to her about this. You'd still have to confirm your hours to her, but does she then intend to give you holiday pay for any regular days you don't work, SSP if you're unwell, and assess your entitlement to be enrolled in a pension plan? 

If you or she decides during or at the end of the shadowing period that it's not going to be a longer term arrangement, you won't have gone over the £1k trading allowance, will you?

But if she intends for you to be self-employed with her just finding the clients for you, that may be a bit grey. 

I'm not sure if this is the tool you've used? https://www.gov.uk/guidance/check-employment-status-for-tax

General_Grant

Working for £12/hour for 6 hours and for 6 weeks would amount to £432.  Even if the "shadowing" arrangement continued for another 6 weeks while discussions about employment happened you would still be under £1K and you would not have to register as self-employed.

If you become employed then your employer (your acquaintance) would be responsible for registering this employment with HMRC and deducting any NI and income tax. Clearly then you would not be self-employed.