Advice please – HMRC and freelancers vs employees

[NiceCat]

Hi, I am looking for a bit of advice.

My business is video production, mainly public sector training and information videos, along with some company films. All fairly small scale, and I am a sole trader.

Recently, a media graduate asked if they could do some work experience, which I was happy to oblige. They came along on a few shoots, which worked out well, and they asked if they could help out again. Cutting to the chase, I am not in a position to currently take on a full-time or part-time member of staff, but I have considered some kind of freelance assistant. If I were to suggest to the graduate if they were interested in work on a freelance basis (probably only 3-5 days per month – not regular), could I potentially fall foul of HMRC and their view on freelancers vs. employees???

Many thanks.

 

[paulears]

You could, but HMRC understand this kind of thing, so the test really is if HMRC consider this person as a genuine self-employed person. It will always be a risk, but the risk is mitigated by having certain things in place and evidenced. For me, it works like this. Is the person VAT registered (yes is good, no indicates their income hasn't passed the VAT threshold) What is their URL number. If they cannot provide one, then HMRC don't know about them - so having one is good and not having one is bad.

For me - the people I use who are VAT registered and have a URL, I don't worry about. Many will have their own Ltd company, or will be self-employed with bank accounts with a trading title - Like XYZ Media, and not Fred Smith. When you pay them and it asks is this a personal or business account. If it is business, that's a plus, but personal account a minus. The other thing of course is the old IR35 stuff. For me, if I need 4 people, and I am one of them, then when we arrive at the job, we do our own thing. If I have to supervise them or interfere because they're unable to do what they are supposed to be doing, then alarms ring with me and that worries me.

If people say yes, turn up, do their thing and invoice me without me really knowing what they actually did - because they just did their role - that is a risk I take. A fresh graduate would worry me as to status, because unis never seem to explain self-employment to their students.

Like you - I am self-employed. I would ask them for their URL and PLI details. If they immediately provide them, I'd take the risk. If they cannot, I would not.

 

[NiceCat]

Thank you that's really sound advice!

 

[DontAsk]

Do you mean UTR (Universal Taxpayer Reference) number, not URL? If so I don't believe you can compel someone to disclose it.

 

[paulears]

Ha! Autocorrect. You can't compel them to disclose it, but if it means not being PAYE'd they jump at the chance. When we have a new production with perhaps 25 people working on the show, I know first Thursday will be recent graduate day. Why have I had tax deducted? Did you give the office the UTR number? What is that? Very often two people, same job, one taxed and NI'd the other not.

 

[DontAsk]

Why have I had tax deducted? Did you give the office the UTR number?

You don't need a UTR to pay someone with the correct tax deduction.

 

[paulears]

No - but I want to make sure I have one if I accept an invoice from them, and that's what self-employment means doesn't it. If they don't have a UTR, then they're only pretending to be self-employed.