self employed subcontractor

[tapitapi]

Good evening,
I wish to to find out the difference between a selfemployed subcontractor and an employee please? Also , could you tell me what is required of each domain as mentioned above please?
Thanks tapitapi

 

[Outsourcer]

It's based on the Master / Servant test;

Self Employed / Contractor

• Will provide all his own tools and eqpt to do the job
• Will not work soley for you
• Will have control of the relationship - EG, they decide if they want to do the job and when
• Will invoice for work carried out

Employed

• Will use company tools and eqpt
• Will work soley for you (if full time)
• Will be subservient to the employer, eg, the employer controls the terms of the relationship
• Will work for a pre-agreed contractual rate- Hourly/salary etc

Don't get caught in the trap of letting one drift into the other, thinking that paying them cash and letting them sort their own tax out means they are self employed or worst of all- Trying to avoid being an employer due to fear of the law and ending with them as employees. It WILL come back and bite you on the bum big time some years down the line, as no matter what you call them, they will have FULL employment rights.

I well remember the tribunal case were the MD of a building company told me " he can't do this, he was a self employed formeman". Oh no he wasn't and in 4 years had accrued rather a lot of unpaid holiday. He walked away with £12k !

 

[Bob]

HMRC's opinion here

 

[Andrew @ PLA]

If you aren't sure which bracket you fall into, try the HMRC Employment Status Indicator (ESI) http://www.hmrc.gov.uk/calcs/esi.htm

 

[David Griffiths]

If you aren't sure which bracket you fall into, try the HMRC Employment Status Indicator (ESI) http://www.hmrc.gov.uk/calcs/esi.htm

That's VERY heavily biassed towards employment, and (unless it's been improved) produces rulings that are inconsistent with case law.