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Self-employed rather than employed?

Why does it matter whether a worker is self-employed rather than employed?

Whether you are a business engaging an individual or you are that individual, you need to be aware of the following.

The legal status of an employee differs from that of a self-employed person: a different level of statutory and common law protection is afforded to employment compared to self-employment. In particular, self-employed workers (not just employees) may be covered by equality legislation. The Guidance Note: Employment, Self-employment, and IR35 , sets out a list of rights of a worker if that worker has the status of employee.

If a worker is self-employed, the client business engaging the worker need not operate Pay as You Earn (PAYE). H M Revenue & Customs (HMRC) is therefore suspicious of any artificial self-employment relationship.

A worker’s status in tax law may be different from the worker’s status in employment law.

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