Self Employment
Discussion
I arranged to meet with a local brewery about a potential job and then sent an email asking about the salary just in case we were both wasting each other's time. This is what I got back:
"Pay would depend on the level of commitment to the cause! I am currently preparing the business for a sustained increase in cask/keg production. A new approach to sales and marketing is steadily increasing turnover and this will benefit everyone in the brewery. I'm looking for an effective and enthusiastic brewer to take over the day to day running of production from me so I can manage the business more effectively.
One point you need to know is that we are all self employed at xxxxx, completely flexible of hours worked, holidays taken, as long as production and quality is maintained... Still interested?"
Should I run a mile? It sounds a bit dodgy to me as it's essentially a full time, permanent position.
"Pay would depend on the level of commitment to the cause! I am currently preparing the business for a sustained increase in cask/keg production. A new approach to sales and marketing is steadily increasing turnover and this will benefit everyone in the brewery. I'm looking for an effective and enthusiastic brewer to take over the day to day running of production from me so I can manage the business more effectively.
One point you need to know is that we are all self employed at xxxxx, completely flexible of hours worked, holidays taken, as long as production and quality is maintained... Still interested?"
Should I run a mile? It sounds a bit dodgy to me as it's essentially a full time, permanent position.
Well, before you run a mile, a few things to consider.
By "Local Brewery" I assume you are talking about a small craft-brewing outfit and not Carlsberg if you live in Northampton. That being the case, it's a growing market with ever increasing demand for the types of beers such smaller breweries produce.
Many of these start out more as hobby-businesses, the owners usually more passionate about the product than the business itself. The result is that there is a certain level of 'informality' within the sector beyond what you might normally expect.
As others have pointed out, there are some downsides to a freelance appointment but there are some upsides too; flexibility is one. Potential earnings is another. I'd get the full details of what's on offer and weigh up the pros and cons before completely abandoning the opportunity.
By "Local Brewery" I assume you are talking about a small craft-brewing outfit and not Carlsberg if you live in Northampton. That being the case, it's a growing market with ever increasing demand for the types of beers such smaller breweries produce.
Many of these start out more as hobby-businesses, the owners usually more passionate about the product than the business itself. The result is that there is a certain level of 'informality' within the sector beyond what you might normally expect.
As others have pointed out, there are some downsides to a freelance appointment but there are some upsides too; flexibility is one. Potential earnings is another. I'd get the full details of what's on offer and weigh up the pros and cons before completely abandoning the opportunity.
The problem is that if the potential employer TELLS you that the position is "self employed", the very fact that THEY are telling you what your employment status is a very strong argument that you are NOT self employed.
One of the key tests of whether an individual is a true self employed individual (i.e. running their own business) is how much control the individual is exercising over their own affairs. If the employer is ORDERING you to be self employed, you have instantly failed the "Control" test.
One of the key tests of whether an individual is a true self employed individual (i.e. running their own business) is how much control the individual is exercising over their own affairs. If the employer is ORDERING you to be self employed, you have instantly failed the "Control" test.
I`m surprised they get away with it.
A mate of mine who had a small factory employed all his staff "self employed", until he had a visit that is. They took him to the cleaners, had to pay £000`s is back employer`s NI contributions, as well as a fine. All the "employees" were investigated by HMRC as well.
A mate of mine who had a small factory employed all his staff "self employed", until he had a visit that is. They took him to the cleaners, had to pay £000`s is back employer`s NI contributions, as well as a fine. All the "employees" were investigated by HMRC as well.
StevieBee said:
Well, before you run a mile, a few things to consider.
By "Local Brewery" I assume you are talking about a small craft-brewing outfit and not Carlsberg if you live in Northampton. That being the case, it's a growing market with ever increasing demand for the types of beers such smaller breweries produce.
Many of these start out more as hobby-businesses, the owners usually more passionate about the product than the business itself. The result is that there is a certain level of 'informality' within the sector beyond what you might normally expect.
As others have pointed out, there are some downsides to a freelance appointment but there are some upsides too; flexibility is one. Potential earnings is another. I'd get the full details of what's on offer and weigh up the pros and cons before completely abandoning the opportunity.
I'd probably agree with you that it's worth a punt if it was a new brewery. This particular brewery has been going nearly 15 years so it's clearly not just a temporary thing while they get established.By "Local Brewery" I assume you are talking about a small craft-brewing outfit and not Carlsberg if you live in Northampton. That being the case, it's a growing market with ever increasing demand for the types of beers such smaller breweries produce.
Many of these start out more as hobby-businesses, the owners usually more passionate about the product than the business itself. The result is that there is a certain level of 'informality' within the sector beyond what you might normally expect.
As others have pointed out, there are some downsides to a freelance appointment but there are some upsides too; flexibility is one. Potential earnings is another. I'd get the full details of what's on offer and weigh up the pros and cons before completely abandoning the opportunity.
nought2sixty said:
I'd probably agree with you that it's worth a punt if it was a new brewery. This particular brewery has been going nearly 15 years so it's clearly not just a temporary thing while they get established.
Run away! If they had just started 6 months ago and weren't sure whether it's worth setting everything up because they might not be around in summer then sure, go with it.Old Merc said:
I`m surprised they get away with it.
A mate of mine who had a small factory employed all his staff "self employed", until he had a visit that is. They took him to the cleaners, had to pay £000`s is back employer`s NI contributions, as well as a fine. All the "employees" were investigated by HMRC as well.
This.A mate of mine who had a small factory employed all his staff "self employed", until he had a visit that is. They took him to the cleaners, had to pay £000`s is back employer`s NI contributions, as well as a fine. All the "employees" were investigated by HMRC as well.
They may be getting away with it for now but it’s only a matter of time before they’re told that the people they have are not and cannot be self employed.
Uber is not a tax case. It's an employment rights case. In fact, nearly all the recent headline employment status cases were not tax related (Pimlico Plumbers, Deliveroo etc). HMRC is so short staffed these days they cannot actually investigate all the abuses of employment/self-employment that are actually going on right now. As a result, it is other areas of legislation that are actually first to question status.
With so many high profile cases emerging, HMRC has been embarrassed into stating that it will be looking harder at such situations. - something they should have been doing for years, way before the situation got to the mess it is today.
With so many high profile cases emerging, HMRC has been embarrassed into stating that it will be looking harder at such situations. - something they should have been doing for years, way before the situation got to the mess it is today.
This subject interests me.
Last year, we suffered a 10 month investigation by HMRC on the use of Freelance contracts for temporary staff. Each year we employ anything upwards of 70 to 100 people assigned to fixed term contract projects. It's mainly min wage plus a little more type stuff.
We always offered the choice of PAYE or Freelance contracts to those hired and the split was around 50/50. We 'encouraged' Freelance contracts as it meant we could attain a higher margin through the avoidance of NI employer contributions.
HMRC found we had no case to answer (though they tried very hard to find one!) on account of the fact that we offered a choice but the advice given was that someone can only take a contract if they are a professional freelance operative in the work we are appointing them to do. So, if someone was working as a cleaner or night porter or something before working for us, then they wouldn't be able to take a freelance position with us.
But it's a vague area IMO - What is someone decided to work in our field as a freelance with us as their first contract? How would that be accounted for? And what if they'd done similar work but in a different sector entirely...would that count? Questions I asked HMRC but never got a clear response to.
So taking this and Eric's observations into account, I guess that the same applies to the OP's situation.
We've recently discovered that our primary competitor only offers freelance contracts. We struggle to compete on costs with them and where we loose out to them on tenders, we're normally out by around 9% - 11% on the price which would be accounted for in their avoidance of having to make NI contributions.
So, the question we're asking is "do we report them?".
Last year, we suffered a 10 month investigation by HMRC on the use of Freelance contracts for temporary staff. Each year we employ anything upwards of 70 to 100 people assigned to fixed term contract projects. It's mainly min wage plus a little more type stuff.
We always offered the choice of PAYE or Freelance contracts to those hired and the split was around 50/50. We 'encouraged' Freelance contracts as it meant we could attain a higher margin through the avoidance of NI employer contributions.
HMRC found we had no case to answer (though they tried very hard to find one!) on account of the fact that we offered a choice but the advice given was that someone can only take a contract if they are a professional freelance operative in the work we are appointing them to do. So, if someone was working as a cleaner or night porter or something before working for us, then they wouldn't be able to take a freelance position with us.
But it's a vague area IMO - What is someone decided to work in our field as a freelance with us as their first contract? How would that be accounted for? And what if they'd done similar work but in a different sector entirely...would that count? Questions I asked HMRC but never got a clear response to.
So taking this and Eric's observations into account, I guess that the same applies to the OP's situation.
We've recently discovered that our primary competitor only offers freelance contracts. We struggle to compete on costs with them and where we loose out to them on tenders, we're normally out by around 9% - 11% on the price which would be accounted for in their avoidance of having to make NI contributions.
So, the question we're asking is "do we report them?".
Report them by all means. That's what HMRC wants us all to do.
Only joking.
The whole area is a complete and utter mess. In my view, most of these issues would simply disappear if Employer's NI was not such a massive burden on employers. That is by far and away the main reason why employers are keen NOT to recruit actual staff properly (the other areas are employee rights and other obligations such as pensions).But, of course, the Government is extremely reluctant to grasp the NI nettle.
I attended an Employment Law lecture not so long ago given by an expert in this area (Louise Dunsford QC). She started the lecture by saying "After over 100 years of legislation, court cases and tribunal cases, we still haven't a bloody clue what an employee actually is".
Only joking.
The whole area is a complete and utter mess. In my view, most of these issues would simply disappear if Employer's NI was not such a massive burden on employers. That is by far and away the main reason why employers are keen NOT to recruit actual staff properly (the other areas are employee rights and other obligations such as pensions).But, of course, the Government is extremely reluctant to grasp the NI nettle.
I attended an Employment Law lecture not so long ago given by an expert in this area (Louise Dunsford QC). She started the lecture by saying "After over 100 years of legislation, court cases and tribunal cases, we still haven't a bloody clue what an employee actually is".
Working in construction I hear so many things that people try getting away with. Both employers and employees.
The 'one man band, Ltd company' is something I am glad I never got talked into, I reckon a few people will come unstuck one day.
The 'one man band, Ltd company' is something I am glad I never got talked into, I reckon a few people will come unstuck one day.
Edited by randomeddy on Saturday 17th February 09:29
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