Advice On How Work Is Paid For - Salaried Employee or Self-Employed

SteveBLFC64

Hi All,

I have a quick question regarding whether there are any hard and fast rules regarding whether someone performing admin work on behalf of a charity should be employed or is free to invoice for their hours worked as a self-employed person.

This is for a small charity, which, other than this small number of hours per week, is entirely run by volunteers. The number of hours admin work varies considerably from week to week, and so far, we have been paying for this work for about a year now.

Are there guidelines on this anywhere, ie. if there are a number of hours that someone has to work on a consistent basis, and perhaps over an expected period of time, whereby it is mandatory that they should be offered an employment contract and salary, or is it purely down to the individual, ie. if they are happy to remain self-employed and invoice us, then it is completely down to their choice if that arrangement suits them?

Any comments on this welcome.

Thanks in advance,

Steve

Undervalued

SteveBLFC64 said:

Hi All,

I have a quick question regarding whether there are any hard and fast rules regarding whether someone performing admin work on behalf of a charity should be employed or is free to invoice for their hours worked as a self-employed person.

This is for a small charity, which, other than this small number of hours per week, is entirely run by volunteers. The number of hours admin work varies considerably from week to week, and so far, we have been paying for this work for about a year now.

Are there guidelines on this anywhere, ie. if there are a number of hours that someone has to work on a consistent basis, and perhaps over an expected period of time, whereby it is mandatory that they should be offered an employment contract and salary, or is it purely down to the individual, ie. if they are happy to remain self-employed and invoice us, then it is completely down to their choice if that arrangement suits them?

Any comments on this welcome.

Thanks in advance,

Steve

There is (was?) some guidance on the HMRC website including a quiz that askes a number of questions then suggests the most appropriate option. However,  many people feel it is skewed towards the "employee" answer.

The number of hours varying considerably from week to week is one factor that would help towards the self employed answer. Another would be does this person work for other clients as well as your charity? Who provides the equipment? If they were to mess up some work, would they correct the mistakes in their own time? etc etc.

A wide variation in invoice intervals and amounts would help as might taking some work home rather than always being in the office.

There are many borderline cases but if the charity (employer ??) gets it wrong and particularly if the person has not been declaring their income fully the charity could be liable.

DullGreyGuy

https://www.gov.uk/guidance/check-employment-status-for-tax

The above has a link near the bottom for a high level determination on if someone is an employee, self employed or a contract inside/outside IR35

SteveBLFC64 said:
Are there guidelines on this anywhere, ie. if there are a number of hours that someone has to work on a consistent basis, and perhaps over an expected period of time, whereby it is mandatory that they should be offered an employment contract and salary, or is it purely down to the individual, ie. if they are happy to remain self-employed and invoice us, then it is completely down to their choice if that arrangement suits them?

It has nothing to do with any of those factors but matters like who decides when, where and how the work is done? Can they send a substitute to do the work? Can you require them to do other tasks? Are they providing their own tools (eg computer) or are they using your computer? If they make a mistake do you pay them to fix it?

Note that the tool is not a binding decision, you may decide that they are self employed but HMRC could still come along, decide that actually they are an employee and therefore you need to pay them the Employers NI etc on their wages along with the fines for late payment etc.

SteveBLFC64

Tku for the link - after entering my answers, it did come back with "Unable to make a determination" re: whether work could be regarded as employed or self-employed, so, that makes me more comfortable with the arrangement that we have. 

Savvy_Sue

SteveBLFC64 said:

Tku for the link - after entering my answers, it did come back with "Unable to make a determination" re: whether work could be regarded as employed or self-employed, so, that makes me more comfortable with the arrangement that we have. 

And I think quite reasonably so, however as responsible Charity Trustees you may want to be thinking towards the future and whether in the longer term you will need a paid 'presence' at certain times and for certain tasks which would more naturally lead to an employment situation. 

As a charity grows, it is not unreasonable for an all-volunteer arrangement to become unsustainable in many situations.