You are probably self-employed for tax purposes if:
- you are ultimately responsible for how the business is run, you risk your own capital in the business and you are responsible for bearing losses as well as taking profits
- you control what you do, whether you do it, how you do it and when and where you do it (although many employees do have considerable autonomy)
- you provide the major items of equipment to do your job, not just the small tools which many employees provide for themselves
- you are free to hire or employ other people, on terms of your own choice, to do the work that you have agreed to carry out (however, an employee may also be authorised to delegate work or engage others on behalf of their employer)
- you have to correct unsatisfactory work in your own time and at your own expense
You are probably an employee for tax purposes if:
- you have to do the work that you have agreed to undertake yourself - in other words you can not send a substitute or hire another person to do it
- someone tells you what to do, and when and how to do it
- someone provides you with holiday time off, sick pay or a pension
- you are paid a specific amount an hour, a week or a month
- you can receive overtime pay (although some employees are paid by commission or on a piece-work basis)
- you are expected to work set hours, or a given number of hours a week or month (although some employees have a 'zero hour' contract)
- you work wholly or mainly for 1 business (although some employees work for more than 1 employer)
- you are expected to work at the premises of the person you are working for, or at a place or places they decide (however, a self employed person may, by the nature of their job, have to work at the premises of the person who engages them)
I engage workers, is this information relevant to me?
Yes, it is your responsibility to correctly determine the employment status of anyone who undertakes work for you. If after reading these notes you are unsure about an individual case, please contact us for advice.
But my contract states that I am self-employed?
The reference to 'employed' or 'self-employed' status in a contract does not in itself establish the contractual relationship. We would look beyond the words to the reality of the situation.
I believe I should be treated as self employed, what do I do next?
If you believe you should be treated as self-employed for tax purposes than you should write to us stating the facts of your case. We will then make a ruling based on that information.