The status of self-employed workers is the subject of a number of well publicised employment law cases and HMRC are looking closely at employers who engage with consultants to check whether the consultant is genuinely self-employed or whether the person providing the services should be treated as an employee.
Employment status for employers
It is the employer’s responsibility to check the employment status of a worker where the worker provides their services to the company as an individual.
However, if the employer is a public sector body, the employer is responsible for establishing the employment status of all of its workers, whether they provide personal services directly or through their own limited company. From April 2020, it is proposed that responsibility for applying this “off-payroll working” legislation should be extended to large and medium private sector employers.
We would be happy to review your current arrangements to ensure that any workers or contractors are being treated correctly for taxation purposes.
Employment status for the individual
If you currently provide your personal services to a client through your own limited company, then unless your services are provided to a public sector body, it is your responsibility to consider whether you are caught under the personal service company (IR35) rules such that in the absence of your limited company, you would be treated as an employee of the client.
There are many factors to consider when determining whether an individual would be treated as an employee or a self employed consultant. We are happy to review current or proposed engagements to establish the correct position.