Am I self employed or 'hidden employed'?

[hamilbot]

Hi.
I would really appreciate any thoughts on my working situation please!
I am a self employed dog groomer. I work in a salon with 6 other groomers. One of the groomers owns the business and we pay her 30% of what we earn on each dog we groom.
We provide our own scissors, clippers, trimmers etc and have our own payment machines for customers to pay. We also pay for our own equipment to be maintained.
The business owner provides the premises, table, shampoo, dryers, towels, booking system and clients.
I've recently discovered that as self employed groomers, we should be working under our own business name, provide our own clients and booking system, set our own hours and prices (not undercutting the business owners prices).
Currently, the business owner expects us to work certain times and days and achieve a certain amount of dogs to groom.
We receive no NI contributions, no holiday or sick pay. On particularly busy months, I'm handing over circa £1600 to the business owner (remember there are 4 other groomers who would also be paying the same, sometimes a lot more).
I'm told that I am actually 'hidden employed'. Is this the case? If so, what are the potential risks? Could I be fined by the HMRC? What should I do here?
I would be grateful for any input!

Yeah, this isn’t allowed anymore. To be truly self employed you need to be allowed to choose the work you do and set your hours. You should also be able to hire someone to work in your place etc.

You’re not self employed. Sounds like they’ve got some strange MLM style dog grooming thing going. I guess it’s similar to hairdressers renting a chair in a salon, but they run their own books, clients, hours and just pay a set fee for the chair. Not a percentage of anything. And they actually are self employed as they cut hair under their own name etc.

I haven’t heard of hidden employed. I am a trainee accountant and never heard of the rules you mention; perhaps I am just not there yet.

I would assume you submit a self-assessment like any other self-employed person and only pay tax and NI on your profit.

Go straight to the horse's mouth and check your status on the HMRC website. The right of substitution is probably the most important determinant, i.e. whether your workplace would accept you sending someone else to do the work you do, using your tools/equipment, dealing with "your" customers, and using your card reader, etc. If they're accept that, you're probably OK as self employed, but work through the status checker for other aspects.

https://www.gov.uk/guidance/check-employment-status-for-tax

Far better than relying on "advice" from random people who often get things wrong!!

It’s not about tax. It’s about companies avoiding their responsibilities as employers but having their workers register as self employed… even though the job they are doing is that of an employee and not a self employed contractor.

Handing over a third kf your income is insane

Find own premises and keep all money earned

Yeah that sounds like employment not SE.
If you were SE you’d be setting your own hours and charges.

It's very common in construction, entertainment and tuition industries. All of Deliveroo, Uber and Just Eat are at it too.

It's mostly about avoiding employment rights like NMW, pensions and holiday, sick and parental leave but it also means the employer doesn't pay employers NI contributions so is also a tax dodge. Pretty disgusting and exploitative really.

Thank you. I hadn’t heard the term before. I always thought it was the norm with salons of any type, which I guess dog grooming falls under.

When you are a fully qualified and trained accountant, you will look back on your posts on this thread and cringe. Filing a self assessment doesn’t mean you are definitely self employed. It can mean you are being screwed and getting the worst of each world. There are other factors that determine whether you should be treated as self employed for tax purposes, like if you have the right to choose your own hours and the right of substitution. Why would you assume that working in a salon somehow negates all of the rules about these things?

OP, it’s not you who will be fined here.

It's hard to know if this is a bad deal for you as premises costs add up and you have a provided client base with no marketing costs.
How many hours do you work and what is your take-home pay? (You don't have to answer on here) you indicate you earn £3,733 some months, this seems a good wage depending on what hours you work with your overheads limited to maintaining your own tools and payment/bank charges?

I know HMRC have a tool on their website to work out if you are SE or not, but I'm not sure you can report your employer, or it's just a tool to justify leaving your employer if you know they are screwing you over?

@rollerskatie can a business be fined for this then? By who?

HMRC I presume

It sounds similar to
A beauty salon where the owner acts as an agent for the beauticians. ( owner collects money
Or the owner rents a chair named takes a percentage or set fee.
I think
A legal agreement
Is required to clarify your status especially for the owner and the VAT man.