For many years being Self Employed meant working for yourself with no input from anyone else. Gone are the days of “cash-in-hand” as HMRC are clamping down on the whereabouts of Tax and NI for these services. If you are actively sourcing your own work for yourself and have no input from another source then you can be classed as self-employed, if however, you rely on an agency to source you this work then you are classed as employed and so will need to be PAYE or Limited status.
PAYE can be through either the agency or an outsourced payroll company like ePayMe. Your Tax and NI will be taken from source so delivering a Net Pay to you.
Limited means that you are a director of your own company with an incorporation certificate and company number. You will be responsible for Tax and NI deductions and these will be monitored by HMRC yearly.
If you are claiming to be Self Employed yet working through an agency/company that sources the work for you then you need to rethink what you are doing and at least make sure you are conforming to legislation and putting aside the appropriate Tax and NI in your self-assessment return. If not, then expect a letter from HMRC.
From a workers perspective you need to make sure monies are put aside for Tax and NI as these will be required when the Tax man comes calling.
From an agencies perspective are you 100% certain that these “self-employed” workers are putting money aside for Tax and NI? If not, then HMRC will come calling at your door asking for the money under “debt transfer”. They will get their money one way or another!!
In basic terms if you don’t want a bill from the tax man at the end of the financial year then make sure that you are working correctly in the first place and not as a false self-employed worker.
If you are in any way unsure whether being classed as self-employed is compliant, or you wish to discuss your current status, please call us on 01252 863 700.
You can find out more by visiting: https://www.gov.uk/government/collections/employed-or-self-employed