Self employed sales executives - I am angry!

[Esk247]

Stretch it, its law if a company employs you for more than a year you are then looking at being employed - lets wait for an accountant to come along and clarify it

I think you're looking at it the wrong way.

The person would be 'contracted' for a 12 month period as self employed. They would invoice on a monthly basis or for work completed etc.

I think theres more information here:

http://www.payroll-help.com/faq/self-employed-client-puts-me-on-payroll/

Although you can still read that in either way to be honest. It makes it sound like the employer is trying to get out of paying NI but that isn't always the case, they just don't want the whole nonsense of employing someone and having to build a 500 man/woman HR department to deal with employee 'issues'

 

[kate1]

ESK its law

You cant work for the same company for a year, without having other people you work for, its been like that for ages - otherwise the company would have to employ you

 

[AlexanderR]

ESK its law

You cant work for the same company for a year, without having other people you work for, its been like that for ages - otherwise the company would have to employ you

So if a bricky is self employed, gains a contract to refurbish a home, and it takes 15 months, your saying after 12 of those the contracting employer has to employ them?

The same goes for contracting work in a company, we do not work for the company, we work for ourselves, but we work at the company.

Being self employed means you are a company yourself, a company, does not need to employ a company after 12 months of contracted work.

 

All those contractors who do building work for the government, they are now all civil servants? I remember the Scottish Parliament taking over 12months, wonder what they all do now with their new employed roles

I know the law you are aiming at and you are missing a large chunk of it, that which relates to whether a contractor is in fact and employee because of the conditions laid down within the contract.

This is stupid.. sorry but common sense, you have a 15 month contract to build a phone line for the government as a telecoms engineer, you are not an employee at month 13 you are STILL a contractor and it makes no difference if you have no other jobs.

nighty night

 

[kate1]

Yes correct, because hes probably working for other people and not contracted to that one person

 

[AlexanderR]

Ok fair enough, but the bricky can't do any other work, since he's just 1 man and needs to get the house done. He still doesn't get employed,

The contracted party works 12 hour days, so can't work anywhere else, he doesn't get employed, he gets contracted.

The difference between employed and contracted is only the status assigned by the contract. The only reason a self employed person would move to being employed by the company is if the contract changed. Nothing else interferes with these contracts.

 

[kate1]

Sure Alex, as long as he works for other people, If hes working just on that job and that job only - HRMC would look at him as employed by that person - wish one of the accountants would turn up

 

[Esk247]

If you are contracted to one company for 12 months and do not complete any other invoiced work for other companies then HMRC take the assumption that you are fully employed by that company and so the person must be put on the payroll in month 12 unless the contract is ended by either party.

I think that's how you would explain it.

 

[simon field]

Could the company / subby get round this by the company putting the work out to tender at month 11, and just award the tender to the same bricky?

Or something.

 

If you are contracted to one company for 12 months and do not complete any other invoiced work for other companies then HMRC take the assumption that you are fully employed by that company and so the person must be put on the payroll in month 12 unless the contract is ended by either party.

I think that's how you would explain it.

This is an assumption to determine of you are in fact and employee and not a contractor, i.e. if you must work 9 to 5 consistently over a period, you can INSIST you are an employee..

If you are in reality a contractor, HMRC might assume this but they would need to be corrected!

 

[AlexanderR]

Thats exactly how it works Simon. Although normally freelance and self employed people work with monthly contracts, it's just a case of reprint and sign each month.

Again it doesn't matter how long you work for the company, self employed is exactly what it says it it.

 

[kate1]

This is the thing with self employment Simon you cannot work for the same company year in and year out and be classed as self employed - otherwise they would have to put you on the books, pay holiday, pay sick etc.

I work for several clients - so Im self employed, I dont work for anyone person for any amount of time

 

[simon field]

This is the thing with self employment Simon you cannot work for the same company year in and year out and be classed as self employed - otherwise they would have to put you on the books, pay holiday, pay sick etc.

I work for several clients - so Im self employed, I dont work for anyone person for any amount of time

So how much 'other work for other clients' constitutes enough to satisfy HMRC then?

It's an extreme example, but let's say I have a subby who does 45 hours a week for me, and then does an hour's car-washing on a Saturday (invoice and receipt provided).

Is that enough?

 

[kate1]

As long as he dosent only work for you, difficult one that Simon - was hoping that one of the accountants would take a look in

 

The only reason there is this HMRC guildline is to avoid firms employing people (Treating them as employees) but claiming they are contractors, if you are are actually a contractor none of this applies, the HMRC guidline is to ensure that those who are being treated as employees have rights after a period.

It is to prevent employers saying.. ah him, he is self employed

If you are ACTUALLY self employed, this will not apply.

 

[maxine]

I'm only a part qualified accountant but from what I understand it's not as simple as saying that you genuinely are a contractor, or work less than 12 months, or work for more than one person, or have a part time job. It's covered mostly by the HMRC guidelines here
http://www.hmrc.gov.uk/employment-status/index.htm

People such as builders tend to get around this by being a limited company. Same for IT contractors.

But going back to the job advert posted and applying the basics of the Employment Status Indicator it's clearly an employee not a freelancer in which case I believe a claim can be made to the company retrospectively for taxes that should have been paid.

 

[businessfunding]

As long as he dosent only work for you, difficult one that Simon - was hoping that one of the accountants would take a look in

Sorry but this is plain misleading.

You are correct that the 'employer' cannot dictate that you don't work for anyone else, but as the self employed person you can choose.

AS long as you meet other risk criteria you can still be classed as self employed.

 

[Craigaroo]

It isnt craig, if somebody works for the same company for a year you have to employ them thats HRMC rules, maybe one of the qualified accountants will be along to clarify the situation

Our company have 27 self employed central heating engineers working for us, a good few of them have been doing work with us for many years with no gaps.

We use one of the largest accounting firms in the country, I'm sure they or HMRC would have picked up on something being done incorrectly during our 47 years of trading.

As I said, it's a matter of status NOT length of time working

P.S. Not wanting to start an argument here, it's just an area I have been heavily versed on since I joined the family business

If you were correctly self-employed on day one and nothing changes for 10 years......You are still self-employed.

 

[Craigaroo]

The only reason there is this HMRC guildline is to avoid firms employing people (Treating them as employees) but claiming they are contractors, if you are are actually a contractor none of this applies, the HMRC guidline is to ensure that those who are being treated as employees have rights after a period.

It is to prevent employers saying.. ah him, he is self employed

If you are ACTUALLY self employed, this will not apply.

This is correct, the point is whether or not the person is legitamitely self-employed, if so, the length of time working in that manner has absolutely no relevance.

 

[Jenni384]

Self employment is no longer about how many clients you have.

What needs to be looked at is the relationship the 'self employed' person has with each of his 'clients.' If any of those relationships are like an employee and employer, then you're strictly speaking not self employed [I know, I'm generalising here].

IR35 applies to Ltd Companies only. IR35 seeks to tax the worker through their own Ltd Co as if they were an employee. There is little risk to the employing company because it's the contractor's own company liable for any payroll taxes.

If the worker is an individual, then it's the employer who potentially is liable for loads of payroll tax and penalties, and it really isn't a risk worth taking. The employer in the OP looks to be firmly in this category.

Employment status is a matter of fact, not choice.

 

[Anna Chandley]

ESK its law

You cant work for the same company for a year, without having other people you work for, its been like that for ages - otherwise the company would have to employ you

This is incorrect. If you are self employed then it doesn't matter if you provide services to a company for more than 1 year.

If you should actually be treated as an employee then again it doesn't matter if you have worked for 1 year or more than 1 year as you should be treated as an employee from day one.

IR35 applies to Ltd Companies only.

IR35 can also apply when services are provided via a partnership or LLP.


Anna

 

[cheaper accountant]

It's, pain and simple to me that the advert in the original post is wrong to be advertising the employment status as self employed.

Sadly this is common practice and shouldn't be allowed to happen. I see this with graduates selling energy to households; they are told what time they must work between where they must visit, etc, etc, employer (they don't want to be called that!) has complete control over these individuals and goes against being self employed in all respects.

 

[Instabus]

Thing is Kickstart, im good at my job, so would never consider that proposition

Erm, no somebody cant work for you for more than a year you would have to employ them.

It isnt craig, if somebody works for the same company for a year you have to employ them thats HRMC rules, maybe one of the qualified accountants will be along to clarify the situation

Extreme, you cannot work for a company for more than 1 year otherwise they would have to employ you - its the law

Stretch it, its law if a company employs you for more than a year you are then looking at being employed - lets wait for an accountant to come along and clarify it

Crumbs You cannot work self employed for any firm for more than a year. Otherwise they would have to employ you. Like I say wait for an accountant to come along and clarify this

I haven't got to the end of the thread yet to see how this ended but I can't stop myself from pointing out the obvious.

Kate the clue is in what you are saying.
You do NOT employ self-employed people as they are "self-employed"!
So how can the law make them become your employees if they provide their services to your company for longer than 12 months?

There is a common misconception that all comm-only positions are merely a way for the company to avoid the responsibilities of being an employer.
It is true that there are many companies out there that are doing this but equally there are many situations where it is the best way for the company to get the best salespeople and for the best salespeople to earn the most they can.

 

[Instabus]

This is the thing with self employment Simon you cannot work for the same company year in and year out and be classed as self employed - otherwise they would have to put you on the books, pay holiday, pay sick etc.

I work for several clients - so Im self employed, I dont work for anyone person for any amount of time

There are other elements that distinguish self-employed from employed and they have to be taken into account too.

For example, if the company is not dictating the terms of the work, ie no set working hours and nobody to report to and the worker is generating the work for themselves, leads etc then there is no reason why HMRC would need to deem them as employees if this relationship continues for longer than 12 months.

 

[maxine]

If someone who is not a limited company works "self employed" for only one company or business then under certain conditions they will be deemed by HMRC as if they should have been employed.

HMRC won't make them employ them but they may/could charge the business all the employers NI that they should have paid along with any other tax.

The self employed person who should have been treated as an employee then has other employment rights such as statutory holiday paid to them

Companies who have these plans in place for self employed sales teams take this risk as it is tax avoidance and breaks a few other employment rules too.

 

[kate1]

If someone who is not a limited company works "self employed" for only one company or business then under certain conditions they will be deemed by HMRC as if they should have been employed.


As Maxine has said in this line, this is what I was getting at.

 

[Craigaroo]

If someone who is not a limited company works "self employed" for only one company or business then under certain conditions they will be deemed by HMRC as if they should have been employed.


As Maxine has said in this line, this is what I was getting at.

Absolute nonsense. You are talking about something you clearly do not understand.

Rather than exasperate matters I will end my comments here.

 

[maxine]

Kate's not talking nonsense at all. She may not be putting this into accountancy speak but was spot on with highlighting the issue being discussed here!

 

[Laura-Northtag]

I previously had a job where it was "self employed" yet i had office hours to go by. needless to say i dont agree on that and no longer work there or will do any such job again

 

[MrPAYE]

I've only read the last page of posts on this thread but I get the gist of the "argument"

The correct position from a tax point of view is that there is nothing in legislation that states a self-employed worker must become an employee of the engaging business after breaching a certain period of time working for that business. Therefore, 1 week, 1 month, 1 year, 10 years - they are all treated the same as far as the law is concerned.

In practice, however, the longer a "self-employed" worker is with one company, especially where they are working exclusively for this company, the more chance there is of HMRC challenging employment status by default. The main reason for this is that HMRC would not consider someone is running a genuine business when they are, in reality, acting like a full-time employee of the paying company over a considerable period of time.

ANY self employed worker working for a business for more than 12 months would normally automatically be reviewed by HMRC during a PAYE audit on the paying company for employment status issues but, equally, many below 12 months would be as well so the 12 month thing is really a red herring in my view.

 

[JamesMason67]

To get back to the original job offer, I think that in this climate, businesses taking on employed or self employed personell are going to be calling the shots work conditions wise, and you will see a lot more of this type of job offer as work is so scarce.

 

[S-Marketing]

To get back to the original job offer, I think that in this climate, businesses taking on employed or self employed personell are going to be calling the shots work conditions wise, and you will see a lot more of this type of job offer as work is so scarce.

Work will never be scarce for decent sales staff.

 

[crosbtmrkt]

if your advertising for a skilled job commission is the only way to employ someone you pay them more money but only for what they do and i don't see no problem in telling them how you want it done where they do it and when they do it.


people want holidays where you still pay there wages they want to come in to work with hangovers and not get into gear to Tuesday or keep spending hours chatting or on Facebook well let them do it at there own expense and you soon sort out who really wants money, basic wages can even ruin good people they loose that passion for the job.

you give a basic minimum wage to unskilled people but you have a commission only person to supervise, its my opinion that that's what's wrong with this country ( i am from the uk) everyone wants something for nothing at someone else's expense that's why some people would sooner go on the doel than do the job they have probably studied and trained all there life to do on a paid on results basis, when people send in there cvs bragging about what they can do but would take half the money your offering on commission only just to have a basic wage you know what they are saying is just noises there not real words from the heart.


now that's my rant over...LOL

 

[Ryan000001]

Agreed, in a nutshell freelance sales agents are the best sales people in the world.

 

[ia2o]

Also, one person cannot work for one person for more than one year, otherwise they would have to be employed by that company.

Bit late to the party here but I just have to say this isn't true.

You're citing IR35 as the reason, being that any tax saving you make being a ltd co working full time for another company will be eaten up and now with the requirements for contractors to have all the same rights a perms meaning for the company it's less palatable.

However, this is only the case where you are doing a job that a permanent member of staff could do, desktop support, day to day accounts, etc... However I've a number of colleagues who contract to one company for 3 - 4 years, work at their premises but as their working on a fixed project there's no need to go permanent. Once the project finishes, the contract is over.

For a fixed sales job for one person it'd be a hard case to make, but if the job is to deliver a specific target, the timeframe doesn't matter.

 

[Nerrad Elag]

I am a self employed salesperson working in the Upvc industry and have done this for 18 years. I work for one company only and have been with my current one for 2 years. I have earned good money and fully enjoy my job but am more and more being expected to be in the office at set times,perform extra tasks outside the 'sales' role and am having wage/commissions etc altered on a regular basis without warning or discussion. As a result im looking to move on but am annoyed i should have to do this and annoyed that considering im working self emolyed but in an 'employed' way that i have no rights at all to stand my ground. Am i in 'false' self employment? And if so,if i decide to act self employed and they 'ask' me to leave then do i have any rights to complain?

 

[Bob]

@Nerrad Elag Probably best to ask a moderator to move this to start a new thread. This thread is very old

 

[Mike W]

@Nerrad Elag Probably best to ask a moderator to move this to start a new thread. This thread is very old

Given it's his first post, think he'll have any clue what to do?

What would be easier, OP, is if you posted your comment as a new thread/post entirely.

Ps. Of course you're in 'false self employment'. Industry standard.

 

[Bob]

Have a look here. Particularly the employment status indicator tool