Self employment and false self employment

[Chrisdog]

I have read on many websites, starting with HMRC, CAB, ACAS, etc about the difference between self-employed and employed and about how they can they advantage and declare you false self-employed to avoid paying NI contrib, pension, holiday, etc.
My main question is about health care sector.
If somebody is registered as self-employed and works for a Care Home through a Health Care Agency but they are not allowed to send others to do their job, they have certain hours to start or finish or they have to work in a certain place where the agency says - isnt that actually meaning they are employed not self employed? If not, how can somebody work for that Care Home through that Agency and still be self employed if they cannot send somebody else in their place or to go to work when they want?
Thank you all for your time.

 

[Scalloway]

You can use the UK gov Employment Status Indicator to see if it is self employment according to HMRC rules.

https://www.gov.uk/guidance/employment-status-indicator

 

[Chris Ashdown]

Drop a line to HMRC using their anonomous details form

 

[Chrisdog]

You can use the UK gov Employment Status Indicator to see if it is self employment according to HMRC rules.

As far as I know if you cannot send somebody else to do that job, if you have to be there between certain hours etc you are not self-employed. But how they can treat and pay you as self-employed when ESI says you are not. How they can get away with that? I know a lot of carers and RGNs working as SE for Health Care Agencies
I had an argument with somebody about she recruiting SE carers. She said I cannot send somebody else to do that job, that I will work in a Care Home through her Agency and I will fill in invoices and timesheets and send those to them and they will pay me £7,20/h on a weekly basis. For me thats employed but they have others working as SE like that.

 

[Bob]

But how they can treat and pay you as self-employed when ESI says you are not. How they can get away with that?

Truthfully they can get away with it because there are very few HMRC staff dealing with this type of issue and too many firms exploiting this loophole for them to investigate all of them

 

[Newchodge]

If they are found out they will face penalties. The problem is getting someone to report them.

 

[Bob]

The problem is getting someone to report them.

... and then getting someone to deal with the report

 

[Chrisdog]

I was thinking to report them. But will there be anybody checking them?I know a few agencies doing this..

 

[UKSBD]

I was thinking to report them. But will there be anybody checking them?I know a few agencies doing this..

Reporting who?

 

[Chrisdog]

I have 2 friends working as self-employed but actually in a care hone through an agency. Reporting that agency.

 

[Chris Ashdown]

https://www.gov.uk/report-an-unregistered-trader-or-business

 

[Newchodge]

https://www.gov.uk/report-an-unregistered-trader-or-business

I'm not sure this is an unregistered trader.

it is a legitimate trader acting illegally by employing people and claiming they are self employed.

Complaint to HMRC is the first step.

 

[Bob]

It used to be dealt with by DSS Inspectors in the olden days

Maybe a complaint to an Employment Tribunal for lack of holiday pay?

Have a look here

 

[Chris Ashdown]

I'm not sure this is an unregistered trader.

it is a legitimate trader acting illegally by employing people and claiming they are self employed.

Complaint to HMRC is the first step.

The title is misleading have a look inside

 

[Newchodge]

The title is misleading have a look inside

You're right. Looks like a good place to start.

 

[Chrisdog]

Thanks for that link, I will have a look.

 

[Chris Ashdown]

You can always say you were offered a job but they said you must be self employed but you thought that was wrong, no name needed

 

[Clare@ClarityTaxation]

They may well be self employed, agency workers often are. There's more to the difference between employment and self employment than HMRC detail on their website, it's not just the ability to send a substitute and the place of work.

You need to look at 3 main factors, only needing to succeed on one of them to be self employed, although there are numerous other supporting factors too. These are more aimed at disguised employment via limited companies, but the principles are pretty much the same....

Personal service - can the person send a substitute, or do they have to do the work personally.

Control - do they have control over where, when and how the work is carried out. The "how" is often most important as the other two elements are often decided by the nature of the work - my boiler repair man has to repair my boiler in my house because that's where it is, and he cannot turn up at 3am because I'd be asleep and my neighbours pretty annoyed by the noise, but that doesn't mean he has no control over how he repairs it (indeed I wouldn't have a clue how to tell him what to do!), and it certainly doesn't mean he's my employee because of the "where" and "when" being dictated by common sense and logic. On the same logic if a health agency worker is needed they would have to work shifts and certain hours to fit in with the business model, if they just came and went as they pleased it would be a nightmare for the business.

Mutuality of Obligation - this refers to whether one person is required to offer work and the other party is required to accept it on an ongoing basis. Using the boiler example - I can ask the boiler man to do one job then ask him to do another and he is free to refuse either. Equally once he's done job 1 he has no expectation of further work from me.

Then there's things like financial risk, insurances, multiple clients, attitude, plant & machinery, marketing etc to consider.

 

[Chris Ashdown]

I don't feel that your examples are very good

Care agency's use the same people over weeks if not months, they have to follow a route defined by the company

They most likely have to follow a pre set of instructions on their duties and what and how they do the work

You may hire a self employed painter to paint a couple of rooms and that's fine, but if you own a country house and need him to do all your painting for the next year full time he might be considered a employee

 

[Clare@ClarityTaxation]

The length of time isn't a deciding factor in my experience, certainly not if one of the main criteria is met. A painter may work for a year but if he can show there is no mutuality of obligation then he can still argue he's not employed.

I've been involved with contractors for years, all of whom own their own companies. Many of them work for the same client for years, full time, and would not be classed as employed.

The person in question that the OP asked about may we'll be a disguised employee, I'm not saying they aren't. What I'm saying is that it's more complex than just the several points mentioned by previous posters, and that it's not easy to decide from the outside unless you have a copy of the contract and know the full working conditions.

 

[Chrisdog]

Obviously, as a Carer you have to follow certain "universal" rules that are not dictated by somebody but because of the nature of work. My opinion is that because, as a Carer or RGN you:
1. cannot send somebody else to do your job
2. You are not using or providing own materials that are necessary for your job ( lets say hand cream, wipes, antibacterial solutions and other things they use in a Care Home)
3. Ok, you cannot show up or leave work whenever you want and as an agency worker you can refuse shifts but especially when the agency offers you to work in a Care Home and you are SE this cannot work together with you being on their ROTA that is planned in advance.
For those reasons I tend to believe that you cannot be SE and work through an agency in a Care Home.
Compared to your example, you cannot tell the plumber how to fix the boiler, he can decide if he puts that bolt 1st or 2nd or whatever he has to do, normally fixing it. But in a Care Home, they can say to you what to do, in what order, when or how except obvious things that are regulated like moving and handling, infection control,etc.

 

[paulears]

It's just being abused. One recently I was aware of had the person wearing branded uniform in a sign written vehicle provided by the firm, giving customers invoices with the firms name and VAT number, following a printed pre-planned route and having to complete a prescribed list of calls, using supplied tools. They were self-employed. Like hell they are, it's just a con to avoid paying employers NI, and the hassle of PAYE and avoiding holiday pay. Also, makes me wonder off they even have insurance to cover the person if anything goes wrong. Just a huge con.

 

[Dawn Lane]

It's not just the care industry that does this. My husband used to work for a large home improvement company celebrating 50 years in business this year. He was given a uniform, jobs, van, completed timesheets etc but was classed as self-employed. He would get a percentage of the value of the job but never any 'pay' for travel time to/from jobs which could sometimes take up to 3 hours to get to - his firm based in Bodmin covering whole of Cornwall and parts of Devon. Never had holiday pay, could never substitute any one else in his place, no sick pay etc.

When they tried to get him to sign a 14 page document detailing that he couldn't work for anyone else or in the same industry within a 20 mile boundary for 2 years after leaving the company (but would still be self-employed) it was time to leave!

 

[MyAccountantOnline]

.....
If somebody is registered as self-employed and works for a Care Home through a Health Care Agency but they are not allowed to send others to do their job, they have certain hours to start or finish or they have to work in a certain place where the agency says - isnt that actually meaning they are employed not self employed? If not, how can somebody work for that Care Home through that Agency and still be self employed if they cannot send somebody else in their place or to go to work when they want?
Thank you all for your time.

When you look at employment status you have to consider lots of factors and in different circumstances those factors will be given different weighting.

Where hours and the place of work are fixed and substitution isnt permitted its a pointer towards employment but it doesnt mean the individual is definitely employed.

 

[UKSBD]

A related question to anyone who knows

Where an inspection determines that someone who was paid on a self employed basis should have been classed as employed, is there any repercussions to the individual or just the business who employed them?

 

[john1989]

A related question to anyone who knows

Where an inspection determines that someone who was paid on a self employed basis should have been classed as employed, is there any repercussions to the individual or just the business who employed them?

HMRC will pursue the business for any lost tax revenue.

 

[Newchodge]

There will be no repercussions provided you have declared your income, if it means that you owe income tax on it.

 

[john1989]

There will be no repercussions provided you have declared your income, if it means that you owe income tax on it.

The problem is when it is clearly employment but the business treats them as self-employed.

The worker could say that they thought they were employed and they thought that the monies paid to them were net earnings after taxation.

HMRC would gross up the net earnings and recover the tax from the business.

That's why it is important for the engager to determine the correct employment status.

 

[Chrisdog]

I think I will ask HMRC a question regarding being employed or SE in this particular situation and I will let you know.

 

[Bob]

I think I will ask HMRC a question regarding being employed or SE in this particular situation and I will let you know.

Good luck in getting a reply from someone who knows about status

 

[Chrisdog]

This is what I have found related to my question.
Chapter 7 - Part 2 Itepa 2003
This makes me understand that a carer's situation should be treated as employed not self-employed.

(1)This section applies if—

(a)an individual (“the worker”) personally provides, or is under an obligation personally to provide, services (which are not excluded services) to another person (“the client”),

(b)the services are supplied by or through a third person (“the agency”) under the terms of an agency contract,

(c)the worker is subject to (or to the right of) supervision, direction or control as to the manner in which the services are provided, and

(d)remuneration receivable under or in consequence of the agency contract does not constitute employment income of the worker apart from this Chapter.

(2)If this section applies—

(a)the services which the worker provides, or is obliged to provide, to the client under the agency contract are to be treated for income tax purposes as duties of an employment held by the worker with the agency, and

(b)all remuneration receivable under or in consequence of the agency contract (including remuneration which the client pays or provides in relation to the services) is to be treated for income tax purposes as earnings from that employment.

 

[Bob]

I'm not sure that anyone has disagreed with you about what SHOULD be happening. The problem is finding someone to complain and then getting HMRC to do something about it

 

[Chrisdog]

I'm not sure that anyone has disagreed with you about what SHOULD be happening. The problem is finding someone to complain and then getting HMRC to do something about it

I posted that regarding employment status because myself and others were not sure if a carer is employed or self-employed. That's why I posted here, to find different opinions a point in either direction.

 

[UK Contractor Accountant]

Under the new HMRC Agency Reporting Rules they are supposed to send a report every 3 months of payments made to self-employed people as well as people operating through their own Personal Service Company (PSC).

So in theory HMRC should already know about the situation?