Frequently Asked Questions about Self-Employment Status
Q. Why do I have to complete this questionnaire?
HM Revenue and Customs require us to check the status of all contractors. We can only make the decision as to your status if you answer the questions. Generally answering yes points towards self-employment but answering no points to employment.
Q. I want to be self-employed though, what’s it got to do with you?.
The law says that only we can make the decision. If the way you work points to self-employment then yes you can be self-employed. If the way you work however points to you being someone’s employee then you can't be self-employed, even if that’s what you would like.
Q. What does the question mean; do you have the right to refuse any work offered to you?
This means you can say no if you don’t fancy what the agency is offering you. For example, you want to work days but they offer you nights. Can you look elsewhere if you don’t want what's on offer, or they aren’t offering enough money? To be self-employed you must be able to choose who you work for and when.
Q. What does this mean; do you expect to be offered work when this assignment ends?
If an agency gives you work for two weeks and then it comes to an end would you automatically expect them to find you more work, or do they often say I haven’t got anything for you. To be self-employed you have to accept that its down to you to find your work and you cant expect anyone else to give it to you.
Q. Is the way you do your work controlled in the main by you?
To be self-employed you have to have some say on how you do your work. For example, if you are an electrician the foreman might say wire up 10 sockets in this room and leave you to it. If you decide how to install the cables and where to put them that is more like being self-employed than if he says put them exactly as shown on the drawing.
Q. Can your assignment be terminated without notice?
If you are self-employed the work can be terminated at any time. That can be at the end of the job or if the customer has employees that become available and they need to reduce the number of men on a site.
Q. Do you provide your own tools and or equipment?
Self-employed people have their own tools. If you are an employee the employer will always provide these. This wouldn’t include large plant like a forklift truck, or such things as a jackhammer or a dumper truck.
Q. Do you ever provide materials or parts?
The fact that you sometimes provide your own materials and charge the customer for whatever you fit points towards you being your own boss and self-employed.
Q. Do you agree you have no right to holiday pay?
If you are self-employed the agency pays more than if you are an employee. Therefore the self-employed don’t get holiday pay as it's already in the hourly rate agreed.
Q. Do you agree you have no right to SSP/SMP/SPP?
Only employees get statutory sick pay, statutory maternity and paternity pay.
Q. Do you agree you will only be paid when engaged and on site?
The self-employed have no rights to sick pay and the like, so to be self-employed you have to accept that you only get paid for work done.
Q. Have you appointed an accountant to manage your tax affairs?
If you are self-employed you are personally responsible for paying your tax and national insurance. Often a self-employed person has an accountant to look after these sorts of things. An accountant is a strong indication that someone is self-employed because employees normally wouldn’t need one.
Q. Have you registered for VAT?
Employed people cannot register for VAT so again if you do register for VAT it does point to the fact that you are self employed.
Q. Are you currently paying class 2 national insurance?
To be self-employed you must have told HMRC that you intend to be self-employed which means registering with them. The self-employed pay different national insurance contributions than employees. Class 2 NI is £2.40 each week and normally you pay by direct debit. You also have to pay Class 4 NI on the profits of your business.
Q. Are you given instruction and then left to decide how to complete the work?
You can be self-employed even if a foreman or supervisor gives you an instruction about what to do but then leaves you to decide how to get the job done.
Q. Are you registered for CIS with HMRC?
There are special rules for people in construction and to be self-employed you must firstly register under the Construction Industry Tax Scheme. When you do this HMRC give us a special number, called a Unique Taxpayer Reference, UTR, and also what rate of CIS tax we have to deduct from you.
Q. If you make a mistake do you rectify this in your own time and at your expense?
Let's just say the foreman says wire up 10 sockets and leaves you to get on with it. When he comes back he tests them and nothing works. Will you have to find and fix the problem but not get paid anything extra for it?
Q. Do you have a right to provide a substitute worker?
The Contract for Services that you will sign contains a clause which enables you to send a substitute. That right is unfettered but of course is subject to the substitute having the required level of skill and experience to act as your substitute. In the event that you do wish to offer a substitute please contact us immediately. In the event that you do provide a substitute, payment will be made to you and you will be responsible for paying the substitute worker.
Q. Not all of my answers are "yes", what happens now?
The answers to these questions do not ALL have to be "yes", once we receive your response we will contact you to explain whether we think you are self-employed. If you want any further help you can call us on 0845 838 1641 or send us an email to [email protected].
HM Revenue and Customs require us to check the status of all contractors. We can only make the decision as to your status if you answer the questions. Generally answering yes points towards self-employment but answering no points to employment.
Q. I want to be self-employed though, what’s it got to do with you?.
The law says that only we can make the decision. If the way you work points to self-employment then yes you can be self-employed. If the way you work however points to you being someone’s employee then you can't be self-employed, even if that’s what you would like.
Q. What does the question mean; do you have the right to refuse any work offered to you?
This means you can say no if you don’t fancy what the agency is offering you. For example, you want to work days but they offer you nights. Can you look elsewhere if you don’t want what's on offer, or they aren’t offering enough money? To be self-employed you must be able to choose who you work for and when.
Q. What does this mean; do you expect to be offered work when this assignment ends?
If an agency gives you work for two weeks and then it comes to an end would you automatically expect them to find you more work, or do they often say I haven’t got anything for you. To be self-employed you have to accept that its down to you to find your work and you cant expect anyone else to give it to you.
Q. Is the way you do your work controlled in the main by you?
To be self-employed you have to have some say on how you do your work. For example, if you are an electrician the foreman might say wire up 10 sockets in this room and leave you to it. If you decide how to install the cables and where to put them that is more like being self-employed than if he says put them exactly as shown on the drawing.
Q. Can your assignment be terminated without notice?
If you are self-employed the work can be terminated at any time. That can be at the end of the job or if the customer has employees that become available and they need to reduce the number of men on a site.
Q. Do you provide your own tools and or equipment?
Self-employed people have their own tools. If you are an employee the employer will always provide these. This wouldn’t include large plant like a forklift truck, or such things as a jackhammer or a dumper truck.
Q. Do you ever provide materials or parts?
The fact that you sometimes provide your own materials and charge the customer for whatever you fit points towards you being your own boss and self-employed.
Q. Do you agree you have no right to holiday pay?
If you are self-employed the agency pays more than if you are an employee. Therefore the self-employed don’t get holiday pay as it's already in the hourly rate agreed.
Q. Do you agree you have no right to SSP/SMP/SPP?
Only employees get statutory sick pay, statutory maternity and paternity pay.
Q. Do you agree you will only be paid when engaged and on site?
The self-employed have no rights to sick pay and the like, so to be self-employed you have to accept that you only get paid for work done.
Q. Have you appointed an accountant to manage your tax affairs?
If you are self-employed you are personally responsible for paying your tax and national insurance. Often a self-employed person has an accountant to look after these sorts of things. An accountant is a strong indication that someone is self-employed because employees normally wouldn’t need one.
Q. Have you registered for VAT?
Employed people cannot register for VAT so again if you do register for VAT it does point to the fact that you are self employed.
Q. Are you currently paying class 2 national insurance?
To be self-employed you must have told HMRC that you intend to be self-employed which means registering with them. The self-employed pay different national insurance contributions than employees. Class 2 NI is £2.40 each week and normally you pay by direct debit. You also have to pay Class 4 NI on the profits of your business.
Q. Are you given instruction and then left to decide how to complete the work?
You can be self-employed even if a foreman or supervisor gives you an instruction about what to do but then leaves you to decide how to get the job done.
Q. Are you registered for CIS with HMRC?
There are special rules for people in construction and to be self-employed you must firstly register under the Construction Industry Tax Scheme. When you do this HMRC give us a special number, called a Unique Taxpayer Reference, UTR, and also what rate of CIS tax we have to deduct from you.
Q. If you make a mistake do you rectify this in your own time and at your expense?
Let's just say the foreman says wire up 10 sockets and leaves you to get on with it. When he comes back he tests them and nothing works. Will you have to find and fix the problem but not get paid anything extra for it?
Q. Do you have a right to provide a substitute worker?
The Contract for Services that you will sign contains a clause which enables you to send a substitute. That right is unfettered but of course is subject to the substitute having the required level of skill and experience to act as your substitute. In the event that you do wish to offer a substitute please contact us immediately. In the event that you do provide a substitute, payment will be made to you and you will be responsible for paying the substitute worker.
Q. Not all of my answers are "yes", what happens now?
The answers to these questions do not ALL have to be "yes", once we receive your response we will contact you to explain whether we think you are self-employed. If you want any further help you can call us on 0845 838 1641 or send us an email to [email protected].