Self Employed Staff

[1878]

We're currently adding to our workforce and the positions we're advertising for are all self-employed sales positions. We're clearly explaining to the people we're interviewing that they have to arrange their own tax and national insurance contributions but I was just wondering what we should be doing as a business to protect ourselves.

Down the line an issue could arise where a member of the sales team neglects to pay their tax and national insurance but then points the finger at us saying they thought we were paying it.

Are their any readily available documents we can add as part of our starter pack and ask the person to sign to protect ourselves?

 

[Billmccallum]

see http://www.hmrc.gov.uk/ir35/index.htm

and http://www.hmrc.gov.uk/employment-status/index.htm

 

[beasty]

Self Employed Staff.... No such thing

 

[Employer Labour Relations]

Frankly speaking, I have not heard anything like Self Employed Staff. May be this is some new concept. If you are going to work on this new concept, please update about the rules and regulations of this here too so that many people like me come to know about the same. All the best and thanks in advance.

 

[Newchodge]

The most perfectly drafted agreement in the world will not make one iota of difference to your potential liability.

If the relationship between you and the individual is genuinely one of self employment, and they fail to pay their tax and NI, that is a matter solely between them and HMRC. You are not at risk.

If the relationship between you and the individual is actually deemed (by HMRC rules) to be employer/employee then you are liable whether they pay their tax and NI or not.

You need to be sure what the legal relationship is by using the links in Bill's earlier post.

 

[kevin.doran]

Completely agree with Newlodge here, somebody like sjbeale putting a 'contract for services' in place will do absolutely nothing.

Ask yourself, why on earth would you need protection if the relationship is truly one of self employment? If a plumber came to your premises to provide a service would you need to protect yourself?

A self employed individual will need to hand you am invoice ready for payment. So long as the payment you make is for that exact amount, they'll have no grounds whatsoever to suspect you may have been making income tax deductions.

 

[beasty]

I think i could have expanded on my earlier post?

Self employed
staff

These cannot be one and the same person, unless you are part time staff and self employed for a different service to a company, but OP did not mean this.

You are one or the other and the expression should never be used, say contractors or staff as there is no such thing as self employed staff.

 

[kevin.doran]

OP: why do you want to engage these 'employees' on a self-employed basis? Simply to remove the added costs of PAYE?

 

[bwglaw]

This is a minefield for many employers and businesses. Keep it black or white otherwise it will prove costly should HMRC investigate and/or if the individual concerned decides to bring a claim against you.

No agreement can completely protect you from incurring liability because HMRC and the Courts look behind any written agreement to determine the employment status of any particular individual.

When we draft contracts of service, we provide guidance on how these individuals should not be managed on a day-to-day basis.