Just a bit of a whinge really but I was asked by one of my clients today if I could assist in getting a young lad set up as self employed. This particular client helps disadvantaged youngsters in a charity role, which is how it came to his attention. The lad has been given no option but to go self employed or be out of a job, despite being employed by the same firm for the last year.
My whinge is that it really is time the Government makes a clear distinction between what is genuine self employed, and workers who are given no option to go self employed (had it with another client earlier this year but he was in the construction industry and told he had to go CIS, so it was kind of different, although the firm he worked for was a household name). At the moment it is too much of a grey area, with many companies in certain industries preferring their staff to be self employed.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Just joining you in your whinge. Your pal should perhaps be err hmm encouraged to dob in this employer to HMRC for running foul of IR35, although that might lead to the whole lot falling over. I feel sorry for such employees - between a rock and a hard place. HMRC need to stop chasing those that pay but a few days late and concentrate on those who blatently flout the rules.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I couldn't agree more. I work in payroll/accounts for a construction firm and whilst we do have CIS subbies they are either highly specialist limited companies who employ their own staff or very temporary subbies working for multiple companies over the course of a month/year. We employ around 20 men paying sick, holiday pay and pension and it impacts our competitivness.
The client needs to understand that employment vs self employment is not a matter of choice. It is not something that the employer can arbitrarily decide. The facts of the relationship determine whether it is employment or self employment, and this particular case sounds as if it is extremely unlikely that the facts of the relationship would support a determination of self-employment.
Is there a right of substitution? Very unlikely to be the case!
Is there supervision of day to day work? Very likely to be the case
Was/is similar work done in the same organisation by employees? Sounds as if that is the case
Are hours of work and working methods rigidly defined by the organisation? I bet they are
The client can't just decide that a worker isn't an employee in order to skate past holiday pay, sick pay, employers' NI, workers rights etc.
Unfortunately Tom many workers are learning that if they don't agree to becoming self employed then they have no job or can't get a job. Its not right, but understandable when you have bills to pay. I think its going to take several high profile cases lost at tribunal or HMRC dem,anding back tax/NI from the employer for "employers" to stop flouting the rules.
The client can't just decide that a worker isn't an employee in order to skate past holiday pay, sick pay, employers' NI, workers rights etc.
Totally agree with everything you say Tom, but the employer isn't my client. Had he been, I would have gone through the employment status indicator with him.
I was asked by a client of mine if I could register the young lad concerned as self employed. That young man is a client of mine now and I will complete his tax return every year. It is the employers responsibility to determine tax status, not the staff. However, I have, as part of registering, ensured that HMRC have been notified this is a single work placement and named the "employer"
This young lad concerned has been given no choice in the matter
Totally agree with you as well Julie
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I have been involved within the construction industry for over 30 years and nothing has changed even going back to before CIS when the 715 and SC60 vouchers were being issued the majority of workers were expected to be self employed or as Julie says not get work, you still see jobs advertised now which are clearly for full time employment jobs but being offered to subbies with their own van and own tools.
HMRC was meant to crack down on this years ago but nothing seems to have changed, I know of people who have been working for the same contractor for more than 20 years on a day rate basis (plus company van) and are still there, HMRC have investigated and found nothing wrong with the arrangements.
However on the other side I also know a lot of subbies who are happy as they are and would not wish to be employed as well as some who have been offered full time employment but turned it down when realising they would be getting less money.
So unless HMRC actually does something about it I cannot see things changing in the immediate future.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
The client can't just decide that a worker isn't an employee in order to skate past holiday pay, sick pay, employers' NI, workers rights etc.
Totally agree and we bang on about that all the time on here. Problem as Doug says is folk just get away with it all the time! HMRC are supposedly clamping down on the public sector but I cannot see that is working in all areas particularly well at the moment. Eg hospitals with some of their externals - some go overboard, some dont even mention it. HMRC are supposed to be robustly testing this internally (according to a source of mine) but lets see if it actually brings any changes. Likely just affects the ones who like to do things properly in the first place, rather than catch out the wrong-uns!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
