Self employed - Working with one business only ?

[BertJames32]

Looking for some advise.

We are a small pet sitting company, we look after dogs in our home. We always need someone on the premise.

We have been using my partners cousin to be here when we go out and paying minimum wage. shes 17 and has no other job.

She comes, playes xbox, lets the dogs out and takes the odd one for a walk. we pay her at the end of every week when she sends us her hours. Currently shes doing about 20 hours a week for us,

Recently a question has been asked as to whether she needs to be PAYE or Self Employed...

My questions are :
1) Can you be self employed and only invoice one company ?
- She chooses if shes available on the days we need her
2) If she has to be PAYE that means she must have an employment contract and can then have Sick pay holiday entitlements/pay rather than the current situation where she just doesn't come in ..?

I've looked at hmrc's pages of self employment and they list the following: (My responses to the points are in red

Running a business
You’re probably self-employed if you:

• run your business for yourself and take responsibility for its success or failure (Absolutley, is she does want to work she doesn't have too )
• have several customers at the same time (The only point which is a definite no)
• can decide how, where and when you do your work (She does this currently)
• can hire other people at your own expense to help you or to do the work for you (If she wanted to )
• provide the main items of equipment to do your work (None Required)
• are responsible for finishing any unsatisfactory work in your own time (Not applicable)
• charge an agreed fixed price for your work (Yes)
• sell goods or services to make a profit (including through ) (Shes providing us a pet sitting service)

Thanks for your time and responses

 

[Chris Ashdown]

The problem as I see it is HMRC use there mussel when it chooses them to, and if she is seen by them as a employee then they come after you for all the back taxes PAYE, NI and why have you not given holidays etc so could just could face a hefty fine especially as it sounds she is not registered with HMRC. she does have time still to register

There is a point about minimum earnings not requiring tax but have no details if this is applicable

Better or safer for you to take her on as a employee on the dreaded zero hour or maybe a 10 hour or 20 hour contract

 

[Newchodge]

How much does she earn each week?

Does she have any other PAYE income - another job or taxable state benefits, or has she had any since 6 April this year?

 

[BertJames32]

How much does she earn each week?

Does she have any other PAYE income - another job or taxable state benefits, or has she had any since 6 April this year?

No nothing .

 

[Newchodge]

No nothing .

She doesn'tg earn nothing.

 

[BustersDogs]

I'd like to clarify some of your responses.

can decide how, where and when you do your work (She does this currently)
Really? So you need her to be in your home with the dogs. She could decide to take the dogs somewhere else, maybe back to her own house, or out to the beach, or even round to her friends house?

• can hire other people at your own expense to help you or to do the work for you (If she wanted to )
  So you need her to be in your house from Monday from 1-5, you get home an hour early to find a complete stranger that you've never met before in your house that's okay?

• provide the main items of equipment to do your work (None Required)
  She brings her own treats, poo bags, leads, toys, tags with her details on etc? Certainly there is equipment needed to look after dogs.

• charge an agreed fixed price for your work (Yes)

• sell goods or services to make a profit (including through ) (Shes providing us a pet sitting service)
  
  You also mention you are paying minimum wage, and that she sends you her hours and you pay her. That's not a fixed price for the work, it's an hourly rate.
  
  And NOBODY makes a profit from minimum wages, that's why the Government has to provide top up benefits to families.
  
  It's not as difficult as you think to employ someone, nor as expensive. The difficulty is that having dogs at home with us we can't charge enough to make it worth paying someone to care for them, unless we increase the volume of dogs a fair bit.
  
  What are you doing while you are away from the home? If it's walking other dogs, or visiting other pets, then I'd recommend training her (or someone else) up to go out and do the other dogs, while you stay home, because that's a better model for a small company.

 

[SteveHa]

NMW for a 17YO at maximum 20 hours per week would earn max £84 per week, which is below the NI threshold, and we already know that there is no other job, and so below the tax threshold, too. At that rate, also wouldn't qualify for SSP.

She would qualify for paid holidays, but that's likely to be the limit.

She is very much an employee, but if she's the only one, there are no RTI reporting requirements at that level of pay, so give the girl a break and let her have her holidays.

 

[Mr D]

Does rather come across as treated like employee.

There are a few companies out there who believed their staff were self employed. And it has come back to bite them years later.

 

[ecommerce84]

100% she’s an employee in my mind.

If you push her down the self employed route she will have to file a tax return, which i wouldn’t force on my 17 year old cousin to save a bit of paperwork.

She’d likely also need her own Public Liability insurance as yours probably wouldn’t cover her.

SteLacca gives good advice above in that handling her from the paperwork side of things is actually very straightforward.

Personally I’d put her on a zero hours contract and pay her holiday as it accrues.

 

[Gecko001]

1

She’d likely also need her own Public Liability insurance as yours probably wouldn’t cover her.
.

The public liability insurance for the self-employed person is a good point. Your own public liability insurance would probably not cover you for a self-employed person, so the self-employed person would have to take out their own insurance. If you employed them, your public liability would cover the employee, but you would have to take out employer's insurance as well.

I would start thinking long term. Are you going to need someone on a regular basis to work for you? If so then registering as an employer and setting up a PAYE payroll probably is worthwhile now.

 

[Newchodge]

The public liability insurance for the self-employed person is a good point. Your own public liability insurance would probably not cover you for a self-employed person, so the self-employed person would have to take out their own insurance. If you employed them, your public liability would cover the employee, but you would have to take out employer's insurance.

I would start thinking long term. Are you going to need someone on a regular basis to work for you? If so then registering as an employer and setting up a PAYE payroll probably is worthwhile now.

As long as the current person does not earn more than £116 per week, there is currently no need for a PAYE payroll.

 

[MBE2017]

The other criteria I find HMRC use to help decide such things as this, is there any reason why she should not be on the books. From your description I think they would probably decide she should be an employee.

 

[P19Johnson]

looking at companies such as uber and deliveroo, their staff are self employed so maybe look into how that works.

 

[Mr D]

looking at companies such as uber and deliveroo, their staff are self employed so maybe look into how that works.

Has problems later if it turns out they were actually employed and suddenly the business owes tax, NI and holiday pay. Not to mention pension payments.