Self employed or not?

[gotin2amess]

Hi,

I work for a company in a 'freelance' capacity. However, the company requires me to attend mandatory training and other meetings concerned with quality assurance; engages in a process in which 'freelancers' moderate each other's work and includes performance related bonuses in pay.

In fact, compared to other companies with which I have worked, the only difference between being a 'freelancer' and an 'employee' with this company is that I am not guaranteed work, not paid holidays and sick pay and I sort out my own taxes.

Is freelancing very different form being self employed or am I just working for a company that uses 'freelancers' in an economically expedient way?

"self employed" is a very wide and often mis-used term. It encompasses virtually every possible way of working, from owning a shop or factory through to being a "labour only" building site labourer. Lots of people are in the middle of the two extemes, with varying degrees of autonomy, control, supervision, responsibility, risk & reward, etc., and also varying degrees of providing their own equipment or using the client equipment.

Freelancing is one form of self employment, but even within that, there will be great differences between one freelancer and the next.

Thanks. This is helpful.

sounds to me like they are being sneaky and you are actually employed or very possibly a 'worker'.
There are a variety of 'tests' of employment - can you choose to accept work or turn it down, are they obliged to offer it and you accept it? can you substitute someone in your place, do you use their tools and resources, wear branded clothing /vehicle.... the list goes on. Their economic expediency may be saving them a chunk from the tax man and you any kind of employment rights....

do you use their tools and resources, wear branded clothing /vehicle.

Even those in isolation aren't "proof" of employment. Football referees have been held to be self employed even though they wear the official uniform. Domestic engineers/installers have been held to be self employed even though they drive signwritten vans, wear uniform, and use equipment provided by their "employer". Lorry drivers have been held self employed even though they drive a liveried lorry and are told their deliveries/drop offs by "head office". It's numerous things that "paint a picture", or in court terms, to look at the full relationship "in the round".

Hello Kingfisher,

I have agreed a certain allocation of work each week, but it is conditional on the work being available. I can let the company know if I am not able to do a 'piece' of the work and this is fine, but I am only paid for each piece of work I do. I cannot substitute anyone in my place. I use their systems for my work and the material they provide, but my laptop and my home are my medium and place of employment.

I do not wear their branded clothing, but I refer to the company when I deal with clients.

They provide an 'invoice' of all the work I have done and how much I will be paid. I sort out all the self assessment tax.

Do the test on the HMRC website, that should give you a good idea

Do the test on the HMRC website, that should give you a good idea

It's an indicator, not gospel, and skewed very much in HMRC's favour (unsurprising as they wrote it). It doesn't necessarily follow the actual law and court precedent. More like wishful thinking from HMRC rather than reality. But if you come out as "self employed" after following it, all for the better. Just don't assume it's correct in law if your answers result in it saying you're an employee!

I think in particular the "substitute someone in your place" is a very poor test of self-employed or not.

I'm freelance - don't work for one particular client in an office, I work from home for a variety of clients. But each and every one of those clients wants ME to do the work for them, because they value my skills, or because I've done a good job for them in the past. Similarly if I ask Jimmy the plumber to come and fix my dripping tap, I don't expect Billy to turn up.

The whole thing is very complicated though.

I think in particular the "substitute someone in your place" is a very poor test of self-employed or not.

Which is why no single "test" will determine the answer. Some tests are weighted more important/relevant than others. It's when you get several "tests" pointing towards employment that you may have a problem. If all tests except substitution come out indicating self employment, then the substitution test becomes pretty irrelevant. It's "on the whole" that matters, i.e. how many tests show positive as against how many negative, then weighted in importance. A single positive will never "prove" employment nor self employment.

I can't really think of many situations though where you agree for a self-employed person to do a task for you, and it's OK if someone else turns up instead.

Anyway, I'm very sure of my status!

hi gotin2amess sorry dropped off the chat. The HMRC website will give you status as far is tax is concerned. From an Employment Law perspective the employment rights the 'tests' I referred to earlier stand - so I wouldn't rely on the HMRC website for that. Kazzyhoward is correct in that these are not an individual set of tests but are the tests used together with consideration of the facts that a Tribunal would consider.
Key for me is whether you are in business on your own account - do you have any other clients? If this work just rolls on ad infinitum and is your only work, if you are receiving similar benefits to perm staff (bonuses) participating in performance appraisals - I would ( on this info) be advising the Company that there were a strong chance that you were technically an employee or at the very least a worker.

I would be uncomfortable with them providing an invoice and would be seeking to submit that myself with the hours or work I had completed.

Per SileneOliveira there are lots of circumstances where you might substitute. I have done (albeit only once in 10 years) and I know several book-keepers who substitute - think a yoga teacher for example providing yoga at a gym...

Me and DH both contract through our Ltd co
His latest contract says he can’t substitute and I have had previous ones where I’ve been named

Doesn't sound all that much like you are self-employed to me. If they are the ones who decide that you must attend specific events and specify the days and times, and they are the ones who calculate how much they are going to pay you + any bonuses, then it appears that you are not self-employed.

A self-employed person should be able to set their own hours, and you should be the one who is invoicing them, not the other way round.

you should be the one who is invoicing them, not the other way round

"self billing" is very common in many industries, where the "customer" raises the invoice - all above board and allowed by HMRC.

Yes, DH is currently on a Govt contract and that’s self billing ( he just fills in a time sheet)

Kazzyhoward fair enough, but in this case the company is deciding on the rate of performance-related pay as well, which is a different kettle of fish altogether. They are also insisting on mandatory attendance at certain times, and if you are self-employed, then you are supposed to be able to set your own hours. Which says to me that they aren't really playing by the rules. The OP is an employee in everything but name, and is missing out on pension benefits, holiday entitlement, the lot.