Employed & self-employed at the same time - same company

[GT03ROB]

So what complications does this present? I'm guessing HMRC would be interested....

Sounds odd to me so scenario is something like:

• Employed to do a job as an employee at company x for say 2 days a week
• Works self employed for company x another 2 days a week doing the same as they do during their employment.
• Works self employed for other companies for 2 days a week

Company x & employee are both Ok with this arrangement.

[bristolbaron]

Sounds like you’ll want the toast thread!

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Pinkie15]

GT03ROB said:

So what complications does this present? I'm guessing HMRC would be interested....

Sounds odd to me so scenario is something like:

• Employed to do a job as an employee at company x for say 2 days a week
• Works self employed for company x another 2 days a week doing the same as they do during their employment.
• Works self employed for other companies for 2 days a week

Company x & employee are both Ok with this arrangement.

Seems to me that they’re a ‘disguised’ employee at Co x for the 2 days they’re self-employed there and so highly likely to fall within IR35.

[GT03ROB]

Pinkie15 said:

Seems to me that they’re a ‘disguised’ employee at Co x for the 2 days they’re self-employed there and so highly likely to fall within IR35.

That was my thinking so basically no different to if they were simply employed for those 2 days. Just couldn’t see any advantage in doing it.

[StevieBee]

There exists some potential issues here.

What you've described is that of freelance working for which HMRC provide a checklist to determine whether this arrangement is permissible or not. The salient points are that someone is self-employed if:

• they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
• they can decide what work they do and when, where or how to do it
• they can hire someone else to do the work
• they’re responsible for fixing any unsatisfactory work in their own time
• their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
• they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• they can work for more than one client

If all of those apply then there's no issues at all - but that begs the question as to why the person is employed two days a week on a normal payroll. It is generally more advantageous to both the company and the worker to be freelance.

Regardless of whether the company and employee is happy, it's highly likely HMRC won't be with both parties liable for penalty.

There may be some detail that may mean there's an exemption. And there is a special scheme in the construction industry that permits some variance on the ruling.

But as a general rule of thumb, HMRC take a dim view of those that are both employed (PAYE) and self employed (Freelance) unless the latter is entirely different to the former in terms of the type of work done and the sector in which it's done such as a side-hustle endeavour.

HTH

[Murph7355]

GT03ROB said:

Pinkie15 said:

Seems to me that they’re a ‘disguised’ employee at Co x for the 2 days they’re self-employed there and so highly likely to fall within IR35.

That was my thinking so basically no different to if they were simply employed for those 2 days. Just couldn’t see any advantage in doing it.

There is no way, IMO, that the second batch of 2 days would not be considered inside IR35 if it were taken to court and what you have described is accurate. However, as it's now on the employer to determine these things, if they've determined it's outside IR35, and the employee has that in writing, potentially happy days. I'd find that odd for the employer to do that, but who knows.

The third batch of 2 days should be assessed on its merits as to whether it's inside/outside. But again, that risk is for the employer to determine. If they mess this up and end up liable for additional tax payments, that's on them to sort out (assuming the employee hasn't agreed to some daft contractual obligations).