Employed or Self-employed?
An employee is a worker who has entered into, or works under, a contract of
employment. A self-employed person is a worker who is an independent
contractor and who usually works under a contract for services, but it can
be difficult to establish which of these an individual is.
In relation to tax and employment law, where your business engages an
individual worker and does not put them on PAYE as an employee, and the
business pays their invoices for services rendered by them, you will always
need to consider whether that worker is in law genuinely self-employed,
irrespective of the expression used to describe their status or the title
or content of a contract under which they are engaged. Similarly, if you
are the individual concerned, you will need to consider what your status is
Despite arrangements made with the intention of creating a self-employment
relationship, the legal position still might not amount in law to
self-employment. It is therefore always advisable to take relevant legal
advice on your particular circumstances.
It is important to be clear that if (but only if) a worker works through a
PSC, i.e. the worker is not directly engaged by a business, then both the
worker and the business also need to consider the “IR35” information pages.