self-employed but they want to put me on a payroll

(25 Posts)
fifthdayofchristmas Tue 17-Dec-13 22:01:19

long story short - one of the organisations I have been (and still am) working with has just changed the way its finances are managed and claim I must be either registered with companies house and have a registration number or be put on the payroll of a particular organisation in order to be paid for the work I am about to invoice for. As I am not an employee of this organisation, and I took the work on knowing that I could invoice my client direct (they were aware that I was self-employed) I'm not sure that it is wise for me to agree to be put someone else's payroll. I have been told that this is "a new rule". I am wondering if it might be a very local new rule! I will take advice from my accountant and trade organisation, but would be grateful for any thoughts, particularly from anyone who has had a similar issue.

PrincessFlirtyPants Tue 17-Dec-13 22:03:15

Is it a new rule in relation to the automatic enrolment legislation? In which case, I understand their logic.

Would be worth checking that with them.

MegBusset Tue 17-Dec-13 22:05:48

It really depends on the nature of the work you do. HMRC has some helpful guidance here on whether you are an employee or self-employed.

MegBusset Tue 17-Dec-13 22:07:40

As a freelance sub-editor I had one or two clients who insisted on treating me as an employee. It was a minor inconvenience when filling my tax return but otherwise not that much of a big deal (I was treated as a temporary employee on the days that I worked for them and got pay slips accordingly. I also got pro rata holiday pay which was a bonus!). But of course your situation may differ.

There's no problem being self employed & employed (you just fill out an extra page on a tax form) but it depends whether they would then try and change your terms/dictate hours etc. it irritates me immensely (as a sole trader) when large businesses only recognise limited liability companies as suppliers. Grrrr.

Obviously go with whatever your accountant says but here on your behalf

MegBusset Tue 17-Dec-13 22:09:51

Sorry for multiple postings. It may be that your client has had their knuckles rapped by HMRC over treating people as self-employed when really by HMRC rules (see previous link) they should be employees - in which case the company is technically tax avoiding by not paying employers' NI. So some companies are then swinging the other way and treating everyone as an employee even if really they should be self-employed.

fifthdayofchristmas Tue 17-Dec-13 22:19:21

Thanks Princess and Meg. Princess - good point. I'm not sure but I'll check that one. Meg - pretty sure I fulfil all the criteria to be self-employed but this is always worth another look. thanksto both of you.

ChestnutsroastingintheFireligh Tue 17-Dec-13 22:21:20

HMRC are really clamping down. We recently had a phone call from them asking questions about self employed sub contractors etc

I can understand why they are doing this.

PrincessFlirtyPants Tue 17-Dec-13 22:22:47

If it is due to Automatic Enrolment, feel free to PM me and I can talk you through the implications of it if you like. smile

PrincessFlirtyPants Tue 17-Dec-13 22:23:11

Oh and I forgot to say, you are welcome.

fifthdayofchristmas Tue 17-Dec-13 22:27:55

All postings appreciated - please don't apologise Meg! Thanks also for your comments Saintly. I'm a sole trader too! My problem is that I have never worked for the organisation whose payroll they wish to add me to. I can see this causing massive problems with my self-employed status, and I want to remain self-employed. Meg, I think you may be spot on with your second post.

fifthdayofchristmas Tue 17-Dec-13 22:29:21

Cheers Princess - may well take you up on that one once I've done a bit more research smile

PrincessFlirtyPants Tue 17-Dec-13 22:49:47

Not a problem. smile

HMRC have a self employed test somewhere on their website as well. It asks you whether you are setting your own hours, supplying your own equipment etc and then tells you at the end whether you should be employed or self employed.

PrincessFlirtyPants Tue 17-Dec-13 22:59:02

Saintly The Pensions Regulator has a different set of guidelines for employer on who they should assess as a 'worker' and a 'worker' could be a self employed person. Because of the Automatic Enrolment legislation a lot of employers are putting self employed workers onto payroll (not necessarily making any tax or NI deductions) to make it easier to do assessments for AE purposes.

Nope com

Sorry frigging phone

Nope completely confused, although it sounds as if it's something I should understand....

I found a test online & it says at the beginning 'if you are a sole trader you may not need to automatically registered' and then that was it. No more info. The rest of the rest treated me as an employee.

I definitely don't wAnt to be registered to have part of my money put into some crappy pension (presumably many crappy pensions as I work for lots of different large organisations - small amounts but they do sometimes go over the £700 odd threshold in one payment).

I am seriously thinking of giving up my work & claiming carers allowance instead. A lot of the year I struggle to work & care anyway & some months I'd earn more claiming carers. I don't earn enough for this sort of hassle. I think if the organisations I supply to start trying to force this sort of thing on me I will. Taking money out will make to difference smaller & not worth the hassle.

Sorry ranted OT there OP, hope you find a solution & will be following this thread with interest.

TwistedRib Wed 18-Dec-13 07:23:23

This has happened to me. If you only work for one company and noone else then you should be on the payroll . My hourly rate went down as a result but I have paid holidays, sick pay etc. It does take away some autonomy but it's reassuring to have a regular income .

PrincessFlirtyPants Wed 18-Dec-13 08:36:27

Sorry for confusing you saintly.

Essentially, HMRC and The Pensions Regulator have different guidelines on how to define whether someone is truly self employed or whether they are actually a 'worker' I.e look and feel like an employee but aren't on payroll and are registered as being self employed.

As all employers have a legal obligation to follow the Automatic Enrolment legislation they must enrol people into a pension who TPR deem to be a worker but HMRC see as a self employed person. Yes, they are making it unnecessarily complicated.

You won't decide whether you are Automatically Enrolled or not, your 'employer' will. (I appreciate you may not view them as such) if you don't want to be part of the scheme you will have 1 month to opt out of the scheme from being informed that you are being enrolled.

Hope that makes more sense! smile

No thank you princess - you have been really helpful - it is me confusing myself!

fifthdayofchristmas Fri 20-Dec-13 17:55:14

Hi everyone - just a quick update for you. I've just been in touch with my professional organisation's legal department to do some checking of facts. It seems that there has been no change in the law regarding taking on self-employed people, so any shenanigans we experience are likely to be a result of the organisations we supply services to having been chased by HMRC! The advice I was given was to ask on what basis they were needing to change their practice regarding payments. I will use this one next year if necessary - for now I've managed to deliver all work necessary and arrange for payment to be made as per usual so good news smile

PrincessFlirtyPants Fri 20-Dec-13 17:57:23

Fantastic news, my ramblings about Automatic Enrolment weren't relevant this time! Apologies.

TheDoctrineOf2014 Sun 05-Jan-14 23:04:24

Helpful to me Princess as I didn't know there was a difference.

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