Is this legal? I’ve been offered a job where I can be PAYE or self employed. Prospective employer not fussed either way. Not a massive difference in hourly rates so I’ll probably do PAYE and avoid doing any paperwork (not disciplined enough to keep on top of paperwork 
) How much more per hour would make it worthwhile to be SE, assuming it’s legit of course?
Cotswoldcrunch:
Is this legal? I’ve been offered a job where I can be PAYE or self employed. Prospective employer not fussed either way. Not a massive difference in hourly rates so I’ll probably do PAYE and avoid doing any paperwork (not disciplined enough to keep on top of paperwork
It isn’t legal, its tax evasion. Its an employed position and they know it. The employer doesn’t decide whether its self employed, HMRC do so when they get investigated, everyone will be getting tax bills - them, you and every other worker self employed who should be on PAYE.
Self employed wants to be at least 30% above PAYE rate. 25% just about covers holiday pay and employers NI they’d have to pay for someone on PAYE so you want that plus money to cover your costs (accountant etc) and to compensate you for the risks associated with self employment such as not getting paid, them being able to drop you at a moments notice. If they’re paying PAYE £10/hr you want to accept no less than £13. My bet is they pay a quid an hour more? They’re saving loads if they are.
It isn’t legal, its tax evasion. Its an employed position and they know it. The employer doesn’t decide whether its self employed, HMRC do
I agree with Conor- except that HMRC will be satisfied if
- You can send someone else in to do your days work
- You can refuse work
- You can show that you are willing and able to work for other companies if the opportunity arises
It is a myth that you cannot work S/E for just one company over an extended period of time, you can, the difference that HMRC will accept that your are a genuine contractor and not employed if you fulfill the three acid tests above
I worked for a firm with some self employed drivers. They had to go on the books after a while, the firm said they had found out it was not legal.
See above what Rikki said
It’s still a grey area, even for HMRC. If you go onto their website it lays down a list of what defines you as being self-employed, including the 3 definitions that Rikki gave but also a few more somewhat ambiguous ones, but they also state that 3 categories of self-employed are not clear-cut enough to use their own definitions:
company directors and other individuals who hold office
agency workers
anyone providing services through an intermediary (sometimes referred to as IR35 arrangements)
if you then phone your local tax office to get their ‘OK’ you will not get a definitive answer and you will certainly get nothing in black & white.
So at the moment it’s a case of seeing if you can get away with it but it is definitely a good idea to make sure the S/E rates are good enough, as Conor says, and get a good accountant to make sure it’s all done correctly as far as you are concerned - if you can convince yourself and an accountant then you’re almost there.
Rikki-UK:
It isn’t legal, its tax evasion. Its an employed position and they know it. The employer doesn’t decide whether its self employed, HMRC do
I agree with Conor- except that HMRC will be satisfied if
- You can send someone else in to do your days work
- You can refuse work
- You can show that you are willing and able to work for other companies if the opportunity arises
It is a myth that you cannot work S/E for just one company over an extended period of time, you can, the difference that HMRC will accept that your are a genuine contractor and not employed if you fulfill the three acid tests above
Agree. I was even pondering whether to mention to do the acid test - ask them if you can send in someone else when you’re not available if you go self employed with them. If the answer is no, which it invariably is, the self employment thing fails at the first hurdle. Everyone I drove self employed for I did send other people in to from time to time if I wanted time off or was ill.
Conor:
Rikki-UK:
It isn’t legal, its tax evasion. Its an employed position and they know it. The employer doesn’t decide whether its self employed, HMRC do
I agree with Conor- except that HMRC will be satisfied if
- You can send someone else in to do your days work
- You can refuse work
- You can show that you are willing and able to work for other companies if the opportunity arises
It is a myth that you cannot work S/E for just one company over an extended period of time, you can, the difference that HMRC will accept that your are a genuine contractor and not employed if you fulfill the three acid tests above
Agree. I was even pondering whether to mention to do the acid test - ask them if you can send in someone else when you’re not available if you go self employed with them. If the answer is no, which it invariably is, the self employment thing fails at the first hurdle. Everyone I drove self employed for I did send other people in to from time to time if I wanted time off or was ill.
Did you use agency drivers Conor to cover your time off… 
YorkshireJeff:
Did you use agency drivers Conor to cover your time off…
No, friends with licenses but not driving who wanted to earn a bit of money.
I was self employed in another industry… The idea of sending someone else was not an option because the client wanted me to do the job, they were paying for me and not someone else… My accountant had no issue with this. But at the end of every year he would do a breakdown of my client base for the past 12 months and kept this info in my financial notes… At one stage he did say that in the following year I would have to take on some more work for other clients as I was crossing the threshold due to the majority of my work had had started to gravitate around one client… I did explain that if I raised the issue that they should employ me, I would be dropped straight away… The accountant then stated that if the taxman ever raised the issue that they should employed me I would have to agruee that it would would be on a much lower wage and they would get less revenue.
The accountant never raised it again… But I do know that industries like the building trade have had the tax man clamping down on them.
Rikki-UK:
- You can send someone else in to do your days work
Might be a Homer moment Doh-- but if self employed, ie your working for yourself, how would you satisfy this bit?
Your not an employer so there is no one else?
dcgpx:
Might be a Homer moment Doh-- but if self employed, ie your working for yourself, how would you satisfy this bit?Your not an employer so there is no one else?
You sub contract it to a third party (your mate).
Def don’t agree with point 1
I had my own PC business, 2-3 is the norm.
Point 1 isn’t even anywhere there to me. Your SE so you take the work, get paid and its your responsibility to pay tax /NI and declare in your accounts. Refuse and move on to next job
NEVER as an SE did I have to prove I could send anyone else so I could say SE? Really doesn’t make sense
You cant sub out as your now an employer with all the risks associated with your subcontractor as your employee
During my DCPC I was given a friendly heads up by the trainer (agency bod) that because I am on contract of service rather than contract of employment, I am legally bound to provide a replacement if I cant cover a shift. I was only there to do my DCPC and was not contracting to them at the time so it was only passive information rather than a threat and he did say that they (agency) would not actually pursue that rule because they know they would lose the driver