If you are a self-employed IT specialist, a decorator, an HR specialist or any other of the vast number of self-employed roles, you may be aware that the Government is seeking to beef up IR35 to make it more difficult to operate on a self-employed basis.
How is the Government doing this? It is placing the emphasis on the end customer or the agent who supplies you to the end customer to pay PAYE and NIC on any income paid to you, rather than making you liable, in order to frighten those organisations into employing you direct.
Is there a choice? Of course there is, if you are prepared to understand and act like a proper self-employed person and put in place a proper agreement, to evidence what you can and cannot do. However, if you just work for one “employer”, using their equipment and abiding by all their demands, rules and opening hours, it is likely that you would be deemed an employee.
If you are truly self-employed, then you would have control over your own working hours and whether you accepted a new project (indeed the principal also has the right not to offer you work); you would be paid per project, rather than just an hourly rate, benefitting by making a profit from how efficiently you carried out the work; you would use your own equipment; you would do some marketing and work for other principals from time to time; and there would be no restrictions on your right to get someone else to carry out your work, if you so wished (even if in reality this never happened).
Finally, and I believe this is a critical element, you should have a contract between you and each principal, stating that you each have the rights above and evidencing the fact that you are self-employed. This is a very useful document as it can also cover things such as payment terms, intellectual property rights and limitations on the parties’ liability. The alternative is that you have standard terms but you would still need a letter or offer and acceptance of each project, agreed between the parties.
If you want to know more, then contact us at Scott Walby LLP.