One of my clients pays a lady to work for him for a few hours each week, from his bank account. She is self employed and does her own tax return etc. Does my client need anything from her re tax / NI? I was told last night at a meeting I went to that he should have a letter signed by her to say she is self employed. This would then cover him from auto enrolment as well. She does work for other people and has her own small business.
A letter will not cut it if she falls foul of IR35 then she still falls foul of it. You can be self employed for some clients but still fall under IR35 for work done for others. Does she invoice him?
Does she set her own rate, can work on whatever day of the week she chooses, work where she chooses (eg from home as well as his place), can she send someone else in her place if she chooses, who pays to put any of her errors right(it should be her!).
That's just for starters.
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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
No invoices. She does pretty much the same hours each day (4). Its at a kennels so its a bit varied, but everyday includes cleaning and walking dogs. She works Mon - Fri and if he is away she does more hours
No invoices. She does pretty much the same hours each day (4). Its at a kennels so its a bit varied, but everyday includes cleaning and walking dogs. She works Mon - Fri and if he is away she does more hours
I would definitely be wanting an invoice. Whether she is genuinely self employed or disguised employment is open to question, but if HMRC investigate it will be your client who will cop for it if found to be disguised employment, and they will expect him to make good the paye and NI, as well as penalties.
I'm interested in how this should be handled on Caroline's side. She can obviously advise, but is it ultimately the client's responsibility to decide the treatment of the "worker"? If the client has got it wrong, does any of the flak come back on Caroline? (genuine questions, I don't know the answers)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Thank you for our advice. I will be speaking to him at the weekend so will tell him she has to start doing invoices. She does do a tax return so would that cover her for her PAYE? what about NI?
Interestingly, how does her role differ to mine? I am self employed as well as this lady, and work for my client for a set amount of time for the same job each month, though I do invoice him, for a set price.
I hope there is no come back on me!! I am going to speak to him and follow it up with an email!!!
If she has other jobs there's a better chance of her being genuinely self employed, but if you read Joanne's (Cheshire) first post it's more about control, and how much say your client has over her role. The more lax that control, the better chance she has of being deemed self employed. If she does her own tax return then the tax and NI will be declared, but I don't think it's unknown for HMRC to still demand PAYE from the employer!
Do you work at the client's premises or from your house? If the latter then no problem at all, as presumably you will work your own hours to get the job done, using your own equipment. If at the client's premises make it as lax as you can, eg choosing your own hours, you setting the rate of pay, making sure that the client doesn't dictate what you do.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Just doing invoices will not help, nor doing a self assessment. This one she is quite clearly an employee. Can't tell if you have seen Johns post, but he is quite right.....add in the other point I made being about correcting the work (at your own expense) and being able to send someone else in (eg holidays, sickness, when you are too busy) shows that it is your business and you are not an employee.
Be careful telling him verbally and in writing that just getting an invoice (will absolve him of his IR35) responsibilities -that could come back to bite when our friends at HMRC start the bigger clamp down on such matters.
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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
