Employment experts - What changes self-employed to employed?

[springlamb]

Dh and I run a small business, which does very well. We've recently moved into bigger premises, done some marketing and have loads of work lined up. We're good at doing what we actually do, but crap at accounting, admin etc.
We want to get some extra help in. In our field, many people work as self-employed and it's likely that someone of the calibre we want is going to be self employed.
But if we have someone working with us, say, 3 days a week, is he going to become in law 'employed' by us because he spends the majority of his working hours in the same place.
Any advice gratefully received. Although we have accountants etc, I don't want to ask them as I've made a fool of myself enough recently - TBH I think their view is that dh and I are away with the fairies!

And we probably are!

Well, will you be paying the tax and ni (employed) or will they (self employed)?

look here

If this person is self employed, they'll decide what their charges are and bill you, and if they want to send one of their staff members to do the work, they can. and so on.

It sounds more like this person will be employed p/t with you, tbh.

It can be quite complicated, there is something called "badges of trade" which are considered in deciding whether someone is self employed or not.
BUT who is paying the tax/ni is NOT a decider - that is what you are doing, not what the employment situation is. If you treat them as self employed and it was decided they are actually employed - they you as the employer would be liable for the tax/ni/penaties/interest.
It's not down to hoe much of a working week the employee spends with you but whether they control their own work, can send a substitute, are taking their own risks (ie if something over-runs they sort it at no extra cost to you for their time), so they provide their own tools.
It can be a delicate balance, although the substitution clause - if genuine - is a real deal swinger towards self-employment.
Please please speak to your accountant, they wouldn't expect you to know this and would rather that you spoke to them before anything is decided, than afterwards when they may have to sort out a mess. And if they wouldn't rather you spoke to them first they are crap and you should change!

If you use someone who has set up their own company to provide an admin service...

and you pay via an "official" invoice, with name/address etc

and the person works for other people in addition to you,

and uses their own "tools of the trade" (prob. a calculator in this case!)

.....you should be ok. - you could always discuss with your local friendly tax office....
(really - you don't want to get stuck with someone elses tax bill....)

I believe they would be responsible for their own tax and NI. [Stops and thinks]
Actually, I was just about to type something else, but it's brought another thought up and I think we may be better off to actually employ someone. I was going to say that we would arrange their hours the preceding week depending on what work we had coming through but would expect to offer about 25 hours a week.
However, that obviously could work against us and create problems in getting our work through - said self-employed person could just say 'tough, I'm taking the next three weeks off to trek in the Himalayas'.
Oh, I really didn't want to get into NI and tax as I am struggling so much with SAGE L50 and VAT. And also, although we have plenty of work for the next quarter, we are a young business in our current form (although we have been doing this for 15 years on a small scale while the dcs needed more attention), suppose the work dries up and we have all these redundancy implications...
How about employing someone on short-term contracts?

Short term contracts don't change the employee/self employed thing. However, the rights to unfair dismissal (the key right which stops you terminating an employee easily) only kick in after 51 weeks (well, a year but there's effectively a rounding up provision), so you do have a 'window' at the start when a dismisal is easy.

Thanks for responses. My [stop and think] moment lasted so long I cross-posted with some of you.
I am coming to the conclusion that doing this with an assistant as self employed would be put me on very soggy ground. The person would be hired for their own expertise and probably would not send a substitute in this field, and would be using our equipment as it's not portable.
I think I have to advertise for an employee for 25 hours a week, and get in touch with that superior b of an accountant about setting up a payroll system. And she'll treat me like an imbecile again just because I'm crap at this sort of thing (but absolutely brilliant at absolutely everything else).
Oh dear, oh dear, oh dear.

Aha, oh small round purple one (whose probably a 5ft9 willowy blonde), so if at week 17 of employment I had to say 'I'm so sorry, we only have £150 worth of work booked in so I cannot afford to pay you after this week but I have taken out a loan to give you a month's money in lieu', I might be OK?

seriously - get a new accountant.
I would NEVER treat a client as an imbecile (well to their face anyway!).
We offer a payroll service at a fixed fee, as I am sure alot of other accountants do. If you are uncertain about running it yourself it might be worth considering.
But really, if you feel like this about your accountant please look around for another.

I feel a bit trapped with her, as she came through a Church contact. TBH she is probably really nice but slightly horrified at our naive attitude. She has said previously that when we want to take on help, I should ring and she'll tell me what to do next.
As you've probably guessed, this is an area in which I have no confidence in myself at all.
We decided to expand the business rather than my return to work in central London now that the dcs are all at school fulltime. There are days when I truly wish I was back in my comfortable Whitehall office working in my rather specialist job which has absolutely nothing to do with numbers.
Ah well, we all have our weak areas, luckily I know mine!
I expect I shall put an ad in next week's paper, bite the bullet and ring the very nice lady tomorrow. I don't want to get the business into a mess when everything else is ticking along nicely.
Thanks for help everyone.

if we didn't have clients who don't know about accounting - we wouldn't have a job!
Definitly ring her - she will want to help before rather than after.
And good luck with finding someone.

Ha ha. Am actually 5 ft 10, but neither willowy nor blonde!

Basically, yes. Up to 51 weeks employees cannot claim unfair dismissal. That means that they cannot attack your reason for the dismissal or the procedure you followed. The only exceptions are discrimination (age, sex, race, religion, disability, sexual orientation) and whistle blowing. If, for example, your employee gets pregnant within 3 months and you respond by firing her, the 51 week rule wouldn't protect you (sure you wouldn't do such a thing, but just as an example). Whistleblowing basically means disclosing wrongdoing - e.g. your husband is defrauding the business, she points it out and you believe him and so fire her for saying it (again, just hypothetically!).

Could you not employ someone to do the nasty bits of running the business that you hate? Like the accounting and admin.

Then you can do what you're good at!

Bringing this back up for a bit more advice please. But let me update you...have advertised for a new employee and have two suitable candidates. We are leaning towards one and want to make a decision on this by Friday lunchtime.

1. Can we offer a four week trial period?
2. I am not sure if this applicant is going to have a P45 as his recent history is as a carer for terminally ill father (now deceased). What tax docs do I need?

Should also tell you - have decided to dump the accountant. And have found a really down-to-earth local bookkeeper who has given me great confidence with the SAGE.

1. Yes. Well. You can make them an offer on a fixed-term 4 week contract with possibility of permanent employment! But probtionary periods aren't unheard of.
2. Was he previously employed by someone? Did he claim carers allowance or anything like that?