Are They Actually Self Employed
If H.M. Revenue & Customs reclassify a self employed person to that of an employee it can be very, very expensive. Many businesses wrongly pay people on a self employed basis when in reality they should be employees. Examples can include consultants, cleaners, nannies, drivers, commission agents and tradesmen, to name just a few. The rules are that to be a self employed, a person should:
In common with the Contractor, not be under any obligation to give, or to accept, any assignment.
Be able to engage other workers to do the job.
Not allow the Contractor to have close supervision of the work.
Not be perceived by other suppliers, employees and customers as being an integral part of the Contractors business.
Ensure that the fee is not time based, is invoiced and then paid like all other suppliers.
Ensure that the contract is for one assignment and not for a continuous supply of work.
Not have use of a Contractors vehicle or have travel or hotel costs reimbursed.
Pay for his own consumables and equipment.
Be in a position to suffer losses, such as a obligation to rectify faults.
Have other customers.
Not use a Contractors e-mail address or their business cards.
Although there should be a written contract, there can be valid commercial reason why one or more of the principles above should not be adhered to. However the more that are not adhered to, especially the first few, the weaker the self employment status will be. Self Employment is not a classification that applies to a person generally, but is a classification that, if justified, applies to an individual contract only. Therefore a person can be both self employed & employed on two or more concurrent contracts.
From March 2019 employees can be paid up to £118.00 per week without deduction of either Tax or National Insurance, provided that the employer holds a signed form P46, certifying you as their main employer.
Wages paid up to £715 pm are also not liable to either tax or National Insurance. However, in addition to holding a form P46 it is necessary to have registered with HM Revenue & Customs as an Employer and to complete a weekly or monthly P11 and submit these details electronically to HM Revenue and Customs.
Minimum Wages with effect from 1st April 2019 are:
16 & 17 inc £4.35 per hour
18 to 21 inc £6.15 per hour
21 to 24 inc £7.70 per hour
Living Wage since April 2019 is:
25 and over £8.21 per hour
Rewarding Your Employees Tax-Free
Car expenses for business travel (45p per mile up to 10k miles)
1st class business travel & five star hotels
£208 p.a. for use of home for business
One mobile phone for business use
Employers pension scheme
Annual staff events (£150 p.a. inc. VAT)
Suggestion or Share incentive schemes
Long Service award after 20 years service
Public transport for disabled employees
In house' sports facilities
Parking costs at or near workplace
Loan of cycle for travel to & from work
Sale of firm's own product, at cost price
Trivial gifts (not money or vouchers) up to £50
(Please contact Ken for full details)