Should I be PAYE? Long term freelancer in one company for over a year

[SweetPotatoPie]

I was persuaded by a company I've worked for on and off as a freelancer for a few years to work for them full time.

This meant taking quite a pay cut compared to my freelance daily rate and I did an all in deal which allowed for me to leave early to collect my daughter from school on certain days - almost unheard of in the world I work in where people are expected to regularly work all hours at the drop of a hat.

I agreed verbally that I would be PAYE, get holiday pay etc which I was keen to do to help with a mortgage after a gap in my finances due to maternity leave. None of this has happened. The person I spoke to initially handed over to someone else who is treating me as just a badly paid freelancer. It has now been over a year of working for just the one company, invoicing monthly, at just over half of what I could earn as a proper freelancer.

Shouldn't I be PAYE if working for just the one company for so long? I enjoy the job and don't really want to leave but I do earn quite a bit less now than when I was properly freelance AND get less time off. They don't pay me for my holidays, which is annoying but does mean I can take more time off than the 20 days which is good for school holidays etc.

And what happens if I get pregnant again, would they be responsible for paying me statutory maternity pay? Of course I have no contract or anything like that - no-one does at this company! This might sound insane but its common in the sector I work in.

Reading this back I'm realising that I should have been much more assertive and insisted that they kept to the original deal in the first place, but I thought it was all happening, just taking time. The company is quite badly organised... When I've brought it up before they've said that thngs are different when you're full time and I shouldn't expect to earn as much etc but why not, if you have no benefits and are doing the same work? I'm wondering if I can insist that they pay me PAYE and/or pay for my holidays - don't they legally have to pay holiday pay after a certain amount of time I want to be PAYE as my earnings look much better on paper for helping with a mortgage application.

I feel like they know that I would struggle to find other work in this sector that would also allow me to see my children as much as I'd like and so are taking advantage a little. Just wondering if I have any legal leg to stand on with insisting that they change things? Otherwise back to a proper freelance life for me...

Thank you all x

[MrsMargoLeadbetter]

Gosh they sound v disorganised or crafty or both. So they basically suggested you go PAYE for less money in return for the benefits of employment....except you aren't employed.

They (and you) can get in trouble over IR35, which is set up to prevent companies avoiding Employers NI and providing other employee benefits when somebody is really an employee and not self-employed.

I would push it, might be worth suggesting you a have talked to HMRC...might scare them in action. They need to produce a staff contract and confirm you are on the payroll.

Mat Allowance was (going back 2 years) based on a certain level of NI 2 contributions, so you could still be entitled to that if you have paid inm The company won't owe you anything as you are not an employee.

[SweetPotatoPie]

Thank you. Hmmm I wonder if I could suggest that HMRC asked me about my tax status and suggested that I should be PAYE, will look into it. That sounds exactly like what they are doing. It's a sector which is very lax in terms of employment laws, working hours and all rules and rugulations so sadly this isn't even unusual for compaies like them.

[LonnyVonnyWilsonFrickett]

Oh they are taking the piss big time and opening you up to all sorts of trouble with the IR as Margo says

I wouldn't hold your breath asking them for proper T's and Cs to be honest, I'd spend the energy getting a properly paid gig elsewhere.

[Kewcumber]

It sounds like you are employee.

There are a whole raft of things that decide whether you're an employee or not though none are definitive.

From HMRC website (my comments in brackets)

Although there is no exhaustive list, the factors to be considered include the following:


control (can you control how you work, when, where etc)
personal service
equipment (do you provide your own)
financial risk
basis of payment
mutuality of obligation
holiday pay, sick pay and pension rights (eg can you just take what holiday you like or do you have to ask for holiday to be approved)
part and parcel of the organisation (do you look like an employee to other people eg are you on the internal phone list)
right to terminate a contract
opportunity to profit from sound management
personal factors
length of engagement
intention of the parties.

I would say you've been given advice that you would be considered an employee and see what they say.

[Kewcumber]

Any fnance director will know that "HMRC asked me about my tax status and suggested that I should be PAYE" isn;t true, thats not how they work (on the whole.

Just say you've been advised that you are obviously an employee. You could say that you are so concerned that you either want to be moved onto an employment contract immediately or for them to indemnify you against any claim from HMRC re unpaid national insurance.

And I'd start job hunting - they sound horrible.

It is illegal for them not to give you a basic contract.

[SweetPotatoPie]

Thank you all. I think I'm going to leave but tbh I have just found out that I'm pregnant and was wondering if I'd be eligible for maternity pay. Sounds like they would try to wriggle out of it anyway. If they really want me there they can either pay me properly or give me a contract and benefits etc. From that list I probably look 50/50 like an employee/freelancer.

They are rubbish but this sort of thing is not at all unusual in the area I work in. Think I'm out anyway!

[SweetPotatoPie]

Kewcumber, what would the situation be with unpaid NI? Would I be personally liable then, rather than the company? Gosh I feel SO ignorant about all of this, how mortifying. That hadn't even occurred to me...

[Kewcumber]

Probably not sweet but asking someone to indemnify you is sometimes a good way to provoke some action. Mind you if they don;t give out contract s they don;t sound like they have anyone who knows what they're doing enough to worry about it!

[Wittynewnameifonly]

If you are self-employed rather than working through your own limited company, then the tax/NI risk lies entirely with the 'employer'. If however you operate through your own limited company then the risk falls to you to operate IR35 if appropriate.

[Kewcumber]

sorry I just assumed Freelancer = selfemployed but witty is right if you are operating through a company

[YonicScrewdriver]

Congratulations on your pregnancy.

Are you paying NI as a sole trader or via your own company?

[SweetPotatoPie]

Thank you Yonic, and sorry for missing these posts, new to MN and still getting the hang of it!

I am paying NI as a self-employed/sole trader.