Forms of Employment - Employed or Self-Employed

Employed or Self Employed


When considering the nature of the position on offer, you should consider whether the job to be filled requires a full-time employee, or whether arrangements such as secondment, part-time or job-sharing may be appropriate.

Employed or Self-Employed

Tax and NIC Issues: Self-employment has evident attractions for both you, as the employer, and also, in many cases, for the self-employed worker. In particular, unlike with an employee, you need not deduct income tax and national insurance contributions (NICs) at source through Pay as You Earn (PAYE.) HMRC is therefore highly suspicious of any artificial self-employment relationship, particularly where the self-employed person has no other 'clients'.

Action should be taken to determine the details of the arrangement and to document it appropriately for purposes of IR35 regulations, so that HMRC will be satisfied that self-employed status is genuine rather than merely a tax-driven device or an attempt to avoid the employment protection rights.

Employment Protection Issues: Self employed people may be covered by equality legislation, depending on the particular situation.

Responsibility for Worker Actions: You may have responsibility for the actions of self-employed people working for you, depending on the particular situation.

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