Self employed issue

[Moonshild]

I have worked for the same person/company for over 25 years. When I started I was asked if I would be self employed - I wasn't very keen but at the time I was very keen to do the job. It was during the recession in the 1990's.

Over the years I have done a mixture of full and part time - due to having children. I am now divorced and although my kids are older - I have one woking and one at Uni - I am the parent who does everything for them financially.
As my job is quite physical - it is getting harder as I get older and I am now in my 50's.
I love my job BUT I don't get paid very well - he sets the amount that I get paid per hour, what I do and where/when I work.
Before lockdown my hourly rate wasn't too bad but I did bar work to boost my income. My pay was frozen during lockdown and eventually went up 1% last February.
I am really struggling but every time I broach the subject of a pay increase - he fobs me off. I have tried asking if he will employ me properly - so I get sick pay, holiday pay and have my tax etc done at source BUT he doesn't want to. He says I will be worse off.

I am trying not to be unreasonable about needing a pay increase but I'm really struggling. I need to be able to present him with what is a reasonable amount to pay me.

What do other people charge as an hourly rate for self employed?

Just for context - I get paid £10 per hour and work 35-40 hours per week depending on what work we have.

That has to cover my tax, national insurance, pension, any time off (sick or holiday), my rent, bills food etc.

I have tried looking for other work in my field but there is very little and I think my age now probably counts against me.

I desperately need advise 🙏🏻

No I didn’t get maternity pay - I had to get government help

Unfortunately the form on this always tells me it can’t help 🤷🏻‍♀️

I would bet that this is a horsey job. You hear about this sort of thing a lot in the horse world.

Lots of people have jumped in about employment status, but to answer your other question, nobody can tell you if the rate is reasonable unless we know what job is, or at least the main duties.

Having said that on a rate of £10 per hour paying your own tax and NIC you’re likely to be earning about £7.50 per hour so we’ll under minimum wage of £9.50 and you don’t get employee benefits and minimum pension.

Your employer is taking advantage of you, and honestly if you leave and get a minimum wage job you would be better off.

To get over minimum wage £9.75 per hour you need an hourly rate of £13. To get just over living wage (£10.50 per hour you need £14.

Plus a pension and redundancy rights. Have you paid your NI for a state pension?

Contact an employment lawyer, and ask them about modern slavery - sounds like you might fit the bill...

I think, if I were you, that I’d be ringing HMRC to ask for advice because he is shafting you and IME the tax man is very helpful in these situations. Good luck op

Thanks for coming back OP - of course you didn't get any Maternity Pay - no self-employed person does. Or holiday pay, sick pay, pension contributions, childcare vouchers or any sort of 'additional pay' or perk at all.

It's not all wfh, jolly niche jobs, etc, etc when you're self-employed; it's often the lowest rung of the pay-ladder despite what laws and MN says.

I'm turning in now, but thinking of you and want to help, any clues to your job and location that you want to put might help me research where you can get some help with this. Back tomorrow, ok to PM me.

I'm gee'd up today by one of my customers - a pisstaker supreme - so that's added grist to my mill.

This is not true. All the rates you quote whether self employed or not will then have tax and NI deducted. You don't get those rates and then tax and NI added on to become a higher rate. So min wage of £9.75 is £9.75 and then tax and NI deducted from that.

@Believ that isn't what I said.

You are right that I didn't deduct tax and NIC from minimum wage and living wage, those are the gross rates, but they give @Moonshild a good idea of how low her rate actually is, especially when you consider that holiday and sick pay have to come out of that as do pension contributions.

In answer to a few of the answers - I work in the sign making industry. My job includes liasing with clients, ordering materials, installing signage, wall paper and graphics on to vehicles.

@FairyBatman - thank you for giving me a figure per hour. That is useful.

Ok but you're not making sense. £9.75 an hour is £9.75 an hour regardless, not needing £13 an hour to become £9.75 an hour. Whether your self employed or employed, tax and NI would be deducted from the £9.75 an hour.

Depending on exactly how OP operates it's entirely possible that they may pass the tests for self-employment. It's also entirely possible that they don't. Nobody has bothered to establish the pertinent facts before jumping to the conclusion that OP is an employee.

Op, as he asked you to be SE, it is you who sets your salary, not him. So. It's you who says, my rates are £13 ph, it is then his choice if he chooses to use you or not.

You need to be prepared to walk away from this job. He has exploited you for years. Working ANYWHERE legal will give you more pay than this - Tesco, McDonald's,etc all crying out for staff at the moment.

I would have a quick check round my area to see if there is a job you can move to, and if yes, tell him your rates are now £13 ph and he can take it or leave it.

Whilst he might use, 'you won't find anywhere else' against you, you can use 'you won't find anyone to work for the pay you offer' against him.

Established beyond all doubt, maybe not. But there is a lot in what OP has said to indicate that this should have been treated as employment. The other party sets the pay rate, determines when the work is done and where, she works more or less exclusively for the one “employer” etc.

Yes there are other tests to explore. I like the substitution one, OP, could you send somebody else along in your place if you wished?

Yes, substitution, plus level of control over how the work is carried out, investment in equipment (a van maybe?), mutuality of obligation, etc.

It's also entirely possible to meet the tests for self-employment while still passing the tests for a 'worker' - i.e. to be responsible for SE tax and NI but to be treated as a 'worker' with regards to minimum wage and holiday pay entitlement.

Sorry maybe the above wasn't really clear.

A PAYE employee earning £9.75 ph and working 35 hours per week will bring home net salary of £16,950 pa. Included in that will be 20 days holiday plus bank holidays.

A self-employed person on £10 ph 35 hours per week and assuming the same holidays will bring home £12,474 net of taxes and NI

To bring home the equivalent of an employee earning minimum wage you need to be paid a rate of just over £13 per hour. £13 would result in a net income of £16,072.

Some things like expenses, pensions might change the figures.

@userxx what sort of reference? If they are paying CG through SA the payment reference should be on their online Personal Tax Account. It begins with an X and is 14 or 15 digets long.

FFS it is still IR35 and still only applies if OP is a director of their own limited company. Why do people who know so little post on here?

Hi Op. I voted that you are not being unreasonable but, you’ve had a lot of useful information and advice on here but they miss the point of your original question, which was how can I get him to pay me more. The answer is that you can’t. You can go to Acas , Hmrc, maybe get him in a lot of trouble with the revenue etc, but will that get you more pay ? It might get you a one off lump sum of arrears and if that’s your aim go for it. You can find comparable jobs and show them to him, but if he says he can’t pay a higher rate your options seem to be suck it up or get a different job. I don’t mean to be mean, but in all likelihood if you do some of the things suggested and he ends up paying the hmrc loads in backdated employers ni etc (and maybe quite rightly) that might be great as an up yours, last hurrah , but I can’t see it leading to higher pay whilst continuing the job you’re doing. Why don’t you look for a better paid job with proper benefits elsewhere? Whilst your situation is unusual and potentially you could get him in a lot of trouble, otherwise the fact that the pay isn’t what you deserve or need isn’t different from many other people in paye jobs.

@raspberrymeringue the situation is rather different from anybody in a PAYE job - the OP earns less than NLW, and presumably receives no holiday pay.

@pigsinoodies That’s true. But she works for a small firm, not Amazon or Tesco with a reputation to protect. She has contact with her boss on a regular basis. She reports him to HMRC and he quite rightly gets in lots of trouble, owes thousands in undeclared ni and taxes etc, and she keeps her job in a lovely happy work environment, on paye with higher pay plus holiday etc. Can you honestly imagine that happening? That’s all I’m saying.

I suppose OP could report him anonymously and hmrc might investigate. But that could take ages and still might not have the desired outcome.

He'll sack her or simply tell her that her self-employed (har-de-har) services are not needed anymore. But since she'd be better off working on the checkouts at Waitrose, it hardly feels like a huge loss. I appreciate OP may not see it that way.

You also need to urgently look at your state pension contributions - don’t stick your head in the sand, have a read of this and check your state pension record to ensure you will get as much as possible

Martin Lewis Money Saving Expert article on pensions

State pension checker