Going back to my old workplace as a P-T freelance instead of P-T employee. What do I need to know?

[abusybee]

I have been contacted by my ex boss to see if I am interested in coming back to work part time from Sept 2 days a week for 20 months. It would be a great job so I am interested but I don?t want to get screwed, especially as a main reason I didn?t go back after having DS3 was that I was only going to clear about £50 per month after paying the childcare and I decided the hassle just didn?t make it worthwhile.

There are 2 options ? return as an employee as before, or come back as a freelance (or should that be self- employed?) on a contract.

What do I need to know about if I change to being a freelance? How do I decide my daily rate?

Off the top of my head I can think that I won?t get hol pay, sick pay, pension so I?d need to factor that in, especially as I?d be employing a childminder so would have to cover her pay even if I didn?t go in for whatever reason.

Upside is that potentially I could make a bit more money as employer is public service so not likely to negotiate on salaried levels were I to go back as an employee, but even adding on £30 a day as a freelance makes a huge difference to what?s left over after the childcare..

And on a quick google I?ve seen some references to taxman not liking you to only have one employer, which I would ? not planning to look for other work in that time. Anyone know if there is a way you can do this? I might do some hours from home during termtime but would normally be going into the office and using equipment etc as if I were an employee and I seem to remember they don't like this either.

And also it would be a job share and the guy covering the other 3 days is definitely going in as a freelance (on high daily rate compared to employee salary). He will be coming into the office etc but also has lots of other clients.

On going back as an employee I think the only change I?d have from before is that I won?t be part of fantastic pension scheme any more and have to join new crappier one, and I wouldn?t be a permanent employee.

I'm chatting to my boss over the next few days so any advice would be gratefully received!

It sounds quite clear to me that you would be an employee, so the only question is you negotiating a salary you are happy with.

Your situation really couldn't be a self-employed one. It's a fixed term contract, with normal employed status and rights.

thanks flowerybeanbag. I am wondering how it can be anything but that too but am basically clueless....

I think the freelance thing has arisen because the other guy has been doing other freelance projects so far and wants to continue on that basis. I am interested because of the potential to squeeze out a few more sheckels but maybe I need to ask what the top of the scale is as an employee and if that squeezes out a few more for me.

Am off out to take kids to swimming lessons so will check back later

thanks

The other guy is in a different situation. If he does other freelance projects and has lots of other clients, that is different and he is self-employed. You are just not in the same situation as him, simple as that.

It's not a case of choosing which option; your employment status is decided by lots of factors mainly to do with the relationship between you and the company paying you, it's not something you can choose as such.

There are some questions you can ask yourself for guidance. I've pasted them below, if you can answer 'yes' to all or most of them, you are self-employer. If you answer mostly 'no', you are employed.

control: the extent to which the employer decides what tasks you do and how you do them

do you have the final say in how the business is run?
can you choose whether to do the work yourself, or send someone else?
can you choose when and how you will work?
integration: the extent to which you're part of the organisation

if you need assistance, are you responsible for hiring other people and setting their terms of employment?
are you excluded from internal company matters such as corporate training and staff meetings?
are you exempt from having action taken against you using the company disciplinary procedure?
are you excluded from company benefits and pension schemes?
mutuality of obligations: the extent to which your employer is required to offer you work and whether you're expected to do it

does your employer offer work only if and when it is available?
can you decide when you will work and can you turn down work when offered?

economic reality: the extent to which you bear the financial risk

are you responsible for meeting the losses as well as taking the profits?
are you responsible for correcting unsatisfactory work at your own expense?
do you have to submit an invoice to the company for your pay?
do you get a fixed payment for a job (including materials and labour)?
do you provide the main items of equipment needed to do the job?
do you work for a range of different employers?

self-employed, good grief my typing is a state today!

I am both an employee and a freelance worker.

To work freelance, you must basically register as self-employed with HMRC, register to pay NIC Class 2 then (if you have low earnings from this work) apply for exemption from NI payments.

You would have to do tax returns !!

Freelancers rates are higher to account for the lack of sick pay, etc. I work mines out on the basis of 200 working days a year (so if you need to earn equivilent of £20k a year, that will work out at £100 a day). There are no guarantees for your ongoing contract. In addition to my rate, I charge 'costs' for postage, materials, phonecalls, expenses, where relevant.

Depending on earnings, you may have to (or want to) become VAT registered but the threshold is fairly high and unlikely to apply if you only do 2 days per week.

My suggestion would be to do your sums carefully - work out exactly whether you would be better off, after NI deductions, childcare costs, etc. It might just be too much hassle for not a lot more financial benefit!!

FWIW, I only work freelance for one organisation.

thanks for all those detailed responses - certainly lots to think about!

FBB - thanks for all those questions. I do think that looking through them I don't think they would apply to me any differently than if I was back in my old job but I'll ask them for a bit more detail.

Looking back to my inbox,the email from my boss does say something like it would be formulated as 'a consultancy role over twenty months for an agreed fee against deliverables' - is this a cunning way of saying something else all together?

Teuch - thanks for this - I had thought about the tax issue but of course had completely forgotten about NI... Do you know anywhere I could find a list of out what those costs are so I can check I'm not forgetting anything?

I've also seen the 200 days figure around, and presumably I'd be looking at 80 days as they want me to cover 2 days a week?

What I'm trying to do is get a handle on what I need to earn to cover my expenses and see if it will be higher than if I went back employed and I'm not sure how to do this - I was being simplistic and just dividing my old salary by 104 to get a daily rate - too simple?

apols if I am seeming clueless about all of this - all help gratefully received

thanks

abusybee I think if your boss is saying anything along those lines he may well be saying it thinking he can avoid employing you properly, either to fiddle headcount/budget figures if he has restrictions on those, or to avoid giving you benefit and other employment rights, such as the right not to be unfairly dismissed, redundancy pay should your contract tip over 2 years, sick pay if you get ill and many other things.

This would be an employment relationship regardless of who pays your tax, so he is mistaken in thinking he can get round it this way but it seems that might be his intention.

It's up to you of course, you must do what you think is best for you, but personally I wouldn't be seduced into thinking you can make a bit more money doing it as a 'consultant' and allowing your employer to try and evade their responsibilities like this.