Deciding someone’s employment status can be complicated and Employment Tribunals and HMRC may consider different factors when deciding what status you have, as there is no single legal definition. IR35 legislation has muddied the legal waters further, and not knowing how to correctly define yourself or your employees can lead to Tribunals and, in some cases, financial penalties. For more information on determining your legal status if you are a Contractor, see our IR35 Guide.
There are three different types of working individuals:
- an Employee
- a Worker (someone who works on a e.g. casual basis or is an agency temp)
- or someone who is self-employed (i.e. a freelancer or contractor)
Employees generally have more employment rights than Workers or those who are Self Employed. There is also a difference in tax, benefits and NI contributions between Workers/Employees and those who are Self Employed.
It is therefore equally important for you to know the correct status of those you employ. It can cost you greatly if you get it wrong. Shaikh & Co have the professional expertise to take into account factors such as basis of payment, right of dismissal, length of engagement, provision of equipment (amongst many others) and advise you on how to respond to HMRC if a case arises.
If you are freelance, have you considered forming a Limited Company? When you decide to become self-employed you also have to decide what legal status your company should have. We are happy to offer you advice on this and other matters at an initial, NO OBLIGATION, FREE CONSULTATION, so why not follow one of the ‘next steps’ below?