"Self employed"

[Loup321]

My OH has a part time (24 hours a week) job, administered through PAYE for tax and NI. He receives payslips and a P60 for this. All well and good.

He also works a few hours a week in a pub and this is on a self-employed basis. He is entitled to no holiday pay or sick pay, and is responsible for paying his own tax. He receives no payslips (or P60, I would guess). There is no paper trail. This is the first tax year of the arrangement.

He has kept a record of his earnings through this pub work, and has been completing a tax return for the last few years. Does he simply put this as a second employment on his tax return? Is there any National Insurance to pay? Does he need to register as self-employed (and would this conflict with his also being employed)? Is there anything else we need to consider?

I'm not bothered about the employers - if they are doing it incorrectly, that's their problem. I just want to make sure that my partner is reporting and paying everything as he should. It's probably below the threshold that they can deduct the tax owed from his PAYE earnings in the next tax year as well.

Thanks in advance,
Lou

[chas49]

IF he's really self-employed(and earnt more than £1000 from self-employment in the tax year 17/18 then the should register for self-assessment and keep records of his business’s sales and expenses, send a Self Assessment tax return every year, and pay Income Tax on his profits, and Class 2 and Class 4 National Insurance.

It may be that he's not self-employed and is just a casual worker. So he should be declaring the income and paying tax and NI on it. And the employer should be paying Employers NI.

You can look at this guidance (https://www.gov.uk/working-for-yourself) to see if he is really self-employed. And use this checker (https://www.tax.service.gov.uk/check-em ... -tax/setup) to get an answer.

[pochisoldi]

My OH has a part time (24 hours a week) job, administered through PAYE for tax and NI. He receives payslips and a P60 for this. All well and good.

He also works a few hours a week in a pub and this is on a self-employed basis. He is entitled to no holiday pay or sick pay, and is responsible for paying his own tax. He receives no payslips (or P60, I would guess). There is no paper trail. This is the first tax year of the arrangement.

He has kept a record of his earnings through this pub work, and has been completing a tax return for the last few years. Does he simply put this as a second employment on his tax return? Is there any National Insurance to pay? Does he need to register as self-employed (and would this conflict with his also being employed)? Is there anything else we need to consider?

I'm not bothered about the employers - if they are doing it incorrectly, that's their problem. I just want to make sure that my partner is reporting and paying everything as he should. It's probably below the threshold that they can deduct the tax owed from his PAYE earnings in the next tax year as well.

Thanks in advance,
Lou

Answers to some questions:

1) "Employed" or "Self employed" is a matter of fact, not something determined by an employer.
2) It's highly unlikely that a pub worker will be self employed, which means they must be employed!
3) It's highly unlikely that the worker isn't entitled to paid holiday, sick pay, and the national minimum wage
4) Employees are entitled to a individual written pay statement
5) You can be employed (in one or more jobs) and be self employed at the same time

Should he register as self employed? I wouldn't - I would be asking for a copy of "my contract" (note that I deliberately said "my contract" not "my contract of employment", as this tells the employer "I think I'm an employee", and for an employee ""my contract" = "my contract of employment"). I would also be asking for copies of my "payment advice" (again, note the use of words: not "payslip" - for an employee "a payment advice"="payslip")

If the bar job looked as if it was going to end (or was becoming the job from hell), I'd probably contact ACAS with a complaint about lack of payslips, failure to pay holiday pay. I wouldn't bother about sick pay, because you won't get it for the first four normal working days anyway (e.g. if you work 1 day a week, you would have to be ill 4 working days = 4 weeks before you got a bean from that job).

PochiSoldi

[chas49]

He also works a few hours a week in a pub and this is on a self-employed basis. He is entitled to no holiday pay or sick pay, and is responsible for paying his own tax. He receives no payslips (or P60, I would guess). There is no paper trail. This is the first tax year of the arrangement.

Answers to some questions:

1) "Employed" or "Self employed" is a matter of fact, not something determined by an employer.
2) It's highly unlikely that a pub worker will be self employed, which means they must be employed!
3) It's highly unlikely that the worker isn't entitled to paid holiday, sick pay, and the national minimum wage

As stated above, employment status is a matter of fact - and it's not one we can determine based on the information given. A bit more detail might enable a reasonable guess, but to get a definitive answer would require more detail than I imagine would be appropriate to post on here.

If the OP gives a bit more detail, we may be able to suggest possibilities.

Otherwise, Pochisoldi's suggestions seem the best way to start off...

[Loup321]

Thanks for the replies. I don't think he is self-employed - he says he has been told he is self-employed by the employer. I think he is a casual worker on a zero-hours contract. Thanks for providing some of the key words I needed to be able to Google for the distinctions. He is already registered for self-assessment, but does that also include NI contributions? If not, how can they be paid in his situation? https://www.gov.uk/national-insurance/how-much-you-pay says they are paid with tax by the employer, but we don't think they are in his case. Or does it matter if his main job says his contributions are up to date? Personally, I don't suppose it does, but morally it does.

He really enjoys the job, and is good friends with the employers. He's not bothered about holiday pay or sick pay, and is getting higher than national minimum wage. I will speak to him about it tonight, and suggest he tells them he will need copies of his payment advice, or something like a P60 after the end of the current tax year. However, he probably won't ask for that, because he is friends with the people he is working for and doesn't want to upset them.

[dspp]

Personally I think if he starts asking for a contract & payment advice notes I think he'll find he is immediately no longer obtaining any work from the pub. He'd still have the first part-time job, but not the pub job. That's the likely reality. I could be wrong.

Therefore what he can do is to complete his tax return, but add the pub earnings into section 2 "self employment". Then add in a written note explaining the circumstances, giving all the details. At various points in the form there is an opportunity to do that. If the extra cash from the pub job is less than £1000 it is possible that HMRC may disregard it in any case. If HMRC decide to include it then he will have been fully transparent, and they'll recode it if necessary (at least that is what they have done when I have been uncertain on things, and given an explanatory comment).

It is also then up to HMRC whether to go and have a chat with the pub directly.

https://assets.publishing.service.gov.u ... 18__1_.pdf

This might be a realistic approach than proceeding directly to losing income !

regards, dspp

[supremetwo]

He also works a few hours a week in a pub and this is on a self-employed basis. He is entitled to no holiday pay or sick pay, and is responsible for paying his own tax. He receives no payslips (or P60, I would guess). There is no paper trail. This is the first tax year of the arrangement.

Paid in cash?

Is so and no other documentation, HMRC will definitely be investigating the paying business when it is entered on the tax return.

https://www.gov.uk/report-cash-in-hand-pay

Definitely not self-employment:-
https://www.gov.uk/working-for-yourself

https://www.tax.service.gov.uk/check-em ... -tax/setup

[johnhemming]

One of my daughters has some pub work from time to time. That is, however, clearly as an employee. This strikes me as undeclared employment.

[Lootman]

One of my daughters has some pub work from time to time. That is, however, clearly as an employee. This strikes me as undeclared employment.

Surely that depends on the frequency and regularity of the work. If she has regular shifts each week and no other work then there is a reasonable argument that she is employed. But if she is just called in on an ad hoc basis, say to cover employees who are sick or otherwise don't show up, and maybe has other work as well, then it isn't.

And I see the fact that someone is paid in cash as irrelevant. What matters is the nature of the employment. There are employees who (still) get paid in cash and self-employed people who are not paid in cash.

When I ran a property business I paid sub-contractors in cash and that was the preference of everyone involved. It was the responsibility of those workers to ensure that their affairs were in order with the authorities. I did wonder from time to time, such as when a contractor would say "pay in cash and there's no VAT on the bill". But I considered that the risk was 100% on them, not me. If someone tells me they are self-employed, then my duty of care is discharged.

[johnhemming]

That may be what you think, but it is the law that has force:
https://www.gov.uk/employment-status/worker

AIUI if you pay someone as self-employed and they turn out to be employed then the employer is liable to pay at least some if not all of the tax that has not been deducted under PAYE.

[Lootman]

That may be what you think, but it is the law that has force:
https://www.gov.uk/employment-status/worker

AIUI if you pay someone as self-employed and they turn out to be employed then the employer is liable to pay at least some if not all of the tax that has not been deducted under PAYE.

AIUI that law is designed to prevent an employer hiring someone for 40 hours a week and then pretending they are self-employed to avoid their obligations.

I was describing someone who does occasional, odd, non-regular pieces of work for someone else. If I occasionally have someone clean my house or mow my lawn, I am not employing them. I am contracting them as self-employed people. And in the dozens of times I have done this over the decades, there has not been a flicker of a problem. The law you cite is not enforced in the manner you suggest.

I am not the employer of the guy who tends my garden every now and then. Nor the woman who stops by a couple of times a month to clean my house. They are self-employed and have many such jobs.

[dspp]

You are both right. It depends on the context.

However in the real world the brother just wants to be legitimate themselves, without losing a part time unreliable source of cash for no good reason.

Hence my practical suggestion as to how to manage it.

regards, dspp

[johnhemming]

I am not the employer of the guy who tends my garden every now and then. Nor the woman who stops by a couple of times a month to clean my house. They are self-employed and have many such jobs.

The key here is that they have many such jobs and also that if they wished to send someone else to do the task you probably would have no objection and also the contract you have does not prevent this.

I think this is quite a good analysis
https://www.taxinsider.co.uk/199-employ ... loyed.html

[chas49]

I am not the employer of the guy who tends my garden every now and then. Nor the woman who stops by a couple of times a month to clean my house. They are self-employed and have many such jobs.

The key here is that they have many such jobs and also that if they wished to send someone else to do the task you probably would have no objection and also the contract you have does not prevent this.

I think this is quite a good analysis
https://www.taxinsider.co.uk/199-employ ... loyed.html

And (possibly) they supply some or all of the tools etc needed to do the job?

Less likely of a pub worker. Unless s/he's a musician or other performer perhaps, but that doesn't sound like what the OP is describing.

[johnhemming]

And (possibly) they supply some or all of the tools etc needed to do the job?

Less likely of a pub worker. Unless s/he's a musician or other performer perhaps, but that doesn't sound like what the OP is describing.

I think that is part of it as well.