taking on a cleaner as self employed?!?!

[Chatter Gear]

Hello,

We started a cleaning business not long ago and now need to hire a cleaner to do jobs for us. The customer will be paying the cleaner cash on the day we will just tell them where to go. They will be self-emp and paying their own NI.

What do we need to do to opperate like this wihin the law?

We are talking ID, proof of address and CRB. In terms of TAX or anything is there anything else?

!? so confused!

 

[Chatter Gear]

To add to this the customer pays us monlth via DD. So we never actually pay our cleaner just the customer.

 

[paulears]

It is illegal to carry out a DBS check unless a very short list of jobs applies - basically there must be children or vulnerable adults involved. If there aren't, then carrying out a DBS check can land you with a hefty fine. I'd be very worried that HMRC would consider them an employee of your client. How do the usual IR35 'rules' fitting this job? Who controls the cleaner - you or the client, who sets the hours, can they supply a replacement, own equipment etc etc?

 

[Newchodge]

What is to stop your client cancelling the DD to you and just paying the individual doing the work?

 

[MyAccountantOnline]

Hello,

We started a cleaning business not long ago and now need to hire a cleaner to do jobs for us. The customer will be paying the cleaner cash on the day we will just tell them where to go. They will be self-emp and paying their own NI.

What do we need to do to opperate like this wihin the law?

We are talking ID, proof of address and CRB. In terms of TAX or anything is there anything else?

!? so confused!

Are you sure they are self employed?

You need to be really careful with employment status - it can be a costly mistake.

You cant just decide to make someone self employed.

 

[MyAccountantOnline]

You may find this helpful.

 

[paulears]

You also need to be very careful with how you word things and how these people put it on invoices. As in "taking on a cleaner..." This in itself says EMPLOYED, engaging a sub-contractor, finding a cleaning business etc etc are quite different that taking a person on - which implies they work for you, which of course a self-employed person doesn't.

 

[Talay]

You direct them, you find their employment, you set dates, times, conditions etc. They are not self employed !

 

[Chatter Gear]

Hello Everyone,

I am a bit surpriseb by the response! I am doing what soooo many other cleaning compaines are doing. All of my regional competion opperate like this, I know for a fact because I have mystery shopped them and seen their job adverts on Gumtree! This is not strange at all, just like a company takes on self-emp sales agents or a wesbite designer uses an external graphic designer or SEO guy.

I just need to know if I am missing anyhing????

 

[Chatter Gear]

Better still a builder using a plasterer or a tiler!!!!!!!!!!!!

 

[M-CLEAN UK LTD]

Did you join the forum to be congratulated for starting your venture or to take the advice of others, who may just have slightly more experience in the legal side of managing a business than yourself.
I subcontract to a plasterer in Sheffield, I am not his main work so it is legal. He is putting invoices for his main work to his clients.

I work with and subcontract to more than one commercial cleaning company, they don't operate the way you do.
The only way you can get around not employing under these circumstances is if you set up a recruitment firm, employ them through this and then get the recruitment firm to satisfy your labour requirements (even this is on the very edge of being legal)
Listen to the advice you have been given, don't think that if others are doing it another way it is ok.
You've interpreted their business actions from being a mystery shopper. If you phoned me up and asked me how much it would be to clean a Supermarket roof I would go and have a look at the job, price it and get it done. I wouldn't give you the finer detail and from that you certainly would not know my staff set up. Even if you asked I wouldn't tell you.

I joined this forum to take advice and to give it where I can. Sometimes it is better to listen and accept that you may not be doing it right and change it while your operation is still young.

The tax man will be a lot less forgiving.

I wish you all the best

Rob

 

[paulears]

A company I do work for fairly regularly had an interesting letter from HMRC a couple of years ago.
It essentially said something like this..
" The information HMRC provided to you two year previously concerning the use of people with self-employed status not requiring you to deduct PAYE and employee and employer NI contributions was in error. " They then had half a million quids worth of unexpected tax and NI. Most of the people contracted were long gone, and HMRC can make mistakes like this, and are not responsible.

The construction industry have been hit hard, leading many to only use the umbrella companies who manage this for them to stop them getting burned. At some point, they'll get you. Why not ask your accountant's opinion, as they'd have to sort out the mess. There's no problem taking on a cleaning company, or a cleaning sole trader, as long as the IR35 rules fit - and I suspect they just won't. However - it's up to you. I think opinion here is that you've crossed the line, and are at risk - but it's your money.

 

[Talay]

HMRC have a test on their website - google for it. If you put in the "real" answers, then you'll likely find that HMRC consider them employed.

Of course, you can bend the truth to obtain the answer you want

 

[Chatter Gear]

A quick google search tells me on the HMRC website that there are special conditions for cleaning staff, also drivers and entertainers etc.

hmrc .gov. uk/manuals/esmmanual/esm4018.htm

So just as i thought, I am correct and you are all wrong!

 

[MyAccountantOnline]

A quick google search tells me on the HMRC website that there are special conditions for cleaning staff, also drivers and entertainers etc.

hmrc .gov. uk/manuals/esmmanual/esm4018.htm

So just as i thought, I am correct and you are all wrong!

Did you read the final paragraph?

It says ''for tax purposes apply the normal rules for determining status''

That takes you right back to here

 

[Vectis]

......I am correct and you are all wrong!

Is there really any point giving advice to people with this attitude?

 

[Chatter Gear]

OK all jokes aside now this seems to be a grey area as such and very dependent on each individual case. Will speak to HMRC on the phone, prob the best way...

 

[bowen]

Does anyone know how Hassle.com, Mopp.com, Homejoy.com and others operate? They make it very clear in their T&Cs that they are "platforms for connecting customers with a cleaner" or words to that effect.

I am very keen to understand how to effectively sub-contract work out to cleaners. I can't see how the above companies are doing this legally because if the cleaners are subcontracted, they should legally be allowed to send someone in their place if they unable to do the work, which would invalidate the "always have the same cleaner each week" selling-point!

 

[paulears]

I think this is exactly what the problem is, people want reliable, honest and trusted cleaners, agency type cleaners don't suit many businesses, so to get them in at set times and the same people, so you can give them keys, let them have access to stores and secure areas means that employees are what they need to be. You can engage a cleaning company of course, and then they employ these people, but a self-employed single cleaner just doesn't fit the role. One of my clients would LOVE to have self-employed bar staff, cleaners and amusement arcade people, but it just doesn't work. It's also very risky to even consider it because if HMRC change their mind in a year or two, even if they tell you it's OK, then they backdate it. I do some work for an agency, and they won't even consider my self-employed status - any work for them is PAYE'd - just too risky.

 

[bowen]

I guess that is my point Paulears, how are the brands I mentioned above doing this successfully? They offer all the benefits such as the same cleaner each week, opportunity to handover keys, specify what the cleaners should do etc. - but the cleaners are very much self-employed, or "microbusinesses" as some of the sales spiel on their sites might have you believe.

 

[paulears]

Maybe they're taking the risk? Who can tell, but the IR35 wording and guide seem rather clear. If you cannot set your own working times, and can't substitute somebody else, then you're an employee. In the industry I work in, one point that comes up in discussion with HMRC is using hours as a calculator of invoice value. It seems ok for plumbers and electricians, but for people who get £X per hour, HMRC consider them employees. My industry work around day rates, irrespective of hours worked - this seems to work for us, but anyone who I use who invoices me with the words wages, employment or hours on their invoice won't be paid. I agree a price for the job, and that's what they invoice for. Maybe this way of working could work for you? Clean XYZ building for the all inclusive fee of £X. The hours they work is up to them? Would this allow you to have the same person. As long as they were also working for other clients, this seems OK with IR35 to me?

 

[nelioneil]

Just to clarify about IR35 references in the thread - this only applies to limited company directors working through their own company. It does not apply to regular sole traders.

Though the principles are somewhat similar regarding deemed employment. In essence, a client or employer cannot determine alone if someone is employees/self employed. It comes down to working practices and control.

 

[paulears]

How so - the self-employment section of the HMRC site takes you to the information -
http://www.hmrc.gov.uk/ir35/leg-applies.htm
This is one such page about IR35, and seems to be aimed pretty well at the self-employed (or) employed. The auto tool checker is here
http://www.hmrc.gov.uk/calcs/esi-01.htm

 

[HRinMinutes]

A number of cleaning agencies operate as a venue so cleaners are matched with house owners and the house owner pays the venue, a bit like People Per Hour does. Its complex and each cleaner will be different in terms of the arrangement.

In most cases it will be the end user house owner who carries the majority of the risk but it all hinges on how it works and so advice, not forum advice, properly paid for insured advice on your own agency arrangements should be sought.

Its a new area for cleaning agencies to exploit what appears to be a loop hole but not all the tests that HMRC apply are on their web site, hence the need to take advice on your business' position before it gets very messy.

 

[paulears]

In many disputes, it's a genuine shock HMRC go against the flow, to the detriment of the tax payer - with many people convinced they have followed the rules, only to be told the official interpretation is different. In this case, while I appreciate the advice to engage a professional is a good one, the fact that mere mortals feel it's almost certainly an employee we're talking about, HMRC would surely also follow suit. All the tests, and common sense info applications point so clearly to employee status that it would be a very brave HR consultant who bucked the trend here. Fancy 'get arounds' would seem very complex to set in place in a safe manner.

 

[HRinMinutes]

Agreed in part but look at the way in which businesses like People Per Hour, ebay shops, Etsy, Shopify and many many other provide venue capabilities to match customers with services for a fee.

The model is there for venue businesses and is likely to be seen across a whole range of industries. It's there for ironing and washing, haulage, courier, handyman, gardening, the list is endless, you cannot just explain it away as ' brave' - its a changing business model rather than just a fancy trend in my view. That does not mean its right for every cleaning business nor one that will work for every customer, but it doesn't have to it just has to work for those who want to use it as their model. Horses for courses really.

 

[nelioneil]

How so - the self-employment section of the HMRC site takes you to the information -
http://www.hmrc.gov.uk/ir35/leg-applies.htm
This is one such page about IR35, and seems to be aimed pretty well at the self-employed (or) employed. The auto tool checker is here
http://www.hmrc.gov.uk/calcs/esi-01.htm

IR35 only relates to companies. if you read the first paragraph it mentions working through an intermediatary or personal service company, like most IT contractors do.