Is he employed or self employed????

[smudgedlipstick]

Hi all, have clearly namechanged...

Please help my clarify if my partner is employed or self employed.. or a subcontractor!

He has worked for the same company for years as self employed, he gets paid through a contract service company that the company he works for use to pay wages. He receives payslips/pay statements through the post every month showing how much he has been paid and how much tax he has paid. He gets paid weekly but just receives a text telling him how much as his hours change every week. This is all from the service contract company. He pays tax weekly out is his wages but he also completes a tax return every year. He doesn't get any holiday pay or sick pay.

Is he employed or self employed??

Or clearly not namechanged.... 🙄

So to clarify:

He doesn’t get to choose his hours?

He doesn’t invoice for work done?

Sounds like one of those cases where a lawyer would argue that he is employed and therefore should receive the benefits associated with such.

If he completes his own tax return, presumably he has other income too eg from savings, investments?

If you ask MNHQ to pop this over to the Employment section you may get more traffic.

It very much sounds like he’s employed. How is his NI dealt with?

Judging by form he is selfemployed ,woks under CIS scheme(?) and completes selfassesment tax return.

As PP mentioned if he doesn't choose his hrs and doesn't submit invoices for his work plus other relevant points ie tools provided by him or by the company,can he replace himself with somebody else if unable to attend shift it could be arguable he is not self employed,bt you would need to go through a lengthy process to obtain employed person benefits..not sure Ive heard about anyone in RL doing it , just learned it in employment law text books.

He doesn't choose hours no, works full time for one company exclusively. He pays tax every month but his national insurance is paid out of his tax rebate every April. He receives no other income at all

Teensandfuture CIS that is is exactly it.

Try this test here: www.tax.service.gov.uk/check-employment-status-for-tax/setup

According to that test he is employed, how do I get a mortgage company to agree this also? We have submitted all his payslips

The company he works for are basically breaking the law. If he doesn’t get a say in his hours and when he will work he isn’t a contractor, he’s an employee and they’ve set this up to avoid paying his tax and insurances properly. He should absolutely get sick and holiday pay.

A case was very recently won by a plumber who took his former company to court for unfair dismissal, the argued he was self employed but the court found he was an employee and should be treated as such

set this up to avoid paying his tax and insurances properly. He should absolutely get sick and holiday pay
It works both ways- selfemployed contractor can claim tax deductible expenditure and overall pays less Tax and NI then an employee.

I thought that CIS had been done away with? Not much help sorry OP

Is he in the construction industry?

Does he get his work via an agency? Technically he's employed by the agency. The pay he receives includes a rate for holiday pay. Eg instead of paying him £12 an hour, they'll pay him £15 an hour and then pay him nothing when he takes a holiday, which they're still supposed to let him do.

It's shit and it's disgusting and I hope it all changes - this is something that HMRC are looking into in various industries. They only do it to get out of giving people employment rights and to dodge tax and NI (the big companies not the workers, who are over a barrel of play the game or get no work).

You could try a mortgage broker who could find a mortgage company who could take his tax returns for X years as proof of income, but it is likely to be not as good a deal as the whole of market.

My husband has exactly the same and he subcontracts work off the company he works for and is self employed. He has 'worked' for the same company for 10 years as has some loyalty to the owner. He is a roofer so this is usual in construction industry as his rate of pay varies from week to week.

teal I think it's umbrella companies that have been done away with in the construction industry? DP is a plant driver on and off last time he did it they paid him via CIS which is fine until you need proof of income for mortgages.

Luckily for us, I'm the main earner with a long term permanent job so we don't need his income for mortgage purposes, but I assume that the OP isn't in this position or else she wouldn't be scratching round for a mortgage product they qualify for.

Sounds like he is a subcontractor under CIS. The contractor will control his hours as that’s the nature of the construction industry but he still is self employed. The CIS scheme means he’ll pay 20% tax on all his earnings but claim back expenses/allowances on his tax return. Why the question though?

There are 2 separate questions here

1. Based on the information provided he SHOULD be an employee

1. However, currently he is being treated as self employed, so this is what he should tell the mortgage company

i did this for ages. He's an employee of an umbrella company, but he's on short term contracts even if they roll over.

I would pay and go to a specialist contractor mortgage company - we used one, high fees but absolutely no hassle.

If you've got 3 years of history in the umbrella company you'll be fine.

to be honest op, if you're confused, the mortgage company is very likely to find it confusing. That's why I would say the arrangement fee for a company dealing with contractors is a good idea.

He is employed. It's just that this company doesn't want him to be, because it's cheaper for them for him to be classed as self employed.

Loads of dodgey dodgey companies do this!!

If he's working in the construction industry as a subcontractor he is self employed. Tax will be deducted at a rate of 20percent by the contractor and he will have to pay his own class2 and class4 NI .

you'll find that the fact the contracts have short end dates even though they roll over is what conventional mortgage companies don't like, ime.

That's why you have to have the 3 year history of being in work (or as long as possible really).

Yes, contracting pays more though, you' are compensated for the risk and it's a very nice earner if you are good with savings for layoffs.

Try the Hmrc status checker otherwise. www.gov.uk/guidance/check-employment-status-for-tax

Ok lots of information there, will try and answer some questions, or clear somethings up:

He has one contract that has been running with the same contract company, so technically they are his employer?

Two other people on the firm have recently got mortgages no problem, just seems to be ours that's being queried, our mortgage advisor I think has put him down as employed as he has mo they payslips which show tax paid.

He isn't agency no, it's a contract company apparently that deal with all the wages for there employees

How are we supposed to get a mortgage for a reasonable amount if this is the case?? It's a reliable wages every single week with out fail for the last so many years, he won't be in a position where he will be out of work ever!