Determining whether someone is employed or self employed depends on several factors and does not just come down to how long someone has worked for you without a break in their contract.
You would need to establish whether the person working for you has a contract of service (employee) or a contract for service (self employed).
Unfortunately HMRC do not give either of these types of contract a statutory definition.
In order to determine the nature of the contract there are a few questions which can be asked:
• Do they have to do the work themselves?
• Can you tell them at any time what to do, where to carry out the work or when and how to do it?
• Can they work a set amount of hours?
• Can someone move them from task to task?
• Are they paid by the hour, week, or month?
• Can they get overtime pay or bonus payment?
If the answer is yes to all of the above questions then they are probably an employee rather than a self employed worker.
If the answer is yes to all of the following questions, it will usually mean that the worker is self-employed:
• Can they hire someone to do the work or engage helpers at their own expense?
• Do they risk their own money?
• Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
• Do they agree to do a job for a fixed price regardless of how long the job may take?
• Can they decide what work to do, how and when to do the work and where to provide the services?
• Do they regularly work for a number of different people?
• Do they have to correct unsatisfactory work in their own time and at their own expense?
I hope the above tests will aide you in confirming if the workers should be employees or not.
Once you have reviewed the above information if you have any questions or if you are unsure of anything please do not hesitate to contact me for further advice on this matter.
As always if you need any help with this please get in touch.
