Confusion over self employed status
Oct 22 2008
HM Revenue & Customs has been cracking down on what constitutes being self-employed.
If the tax office is on your case, then you should ask yourself the following questions:
- Do you provide the main tools and equipment for the business? Are you purchasing machinery, heavy tools or IT for the business? A laptop or tool box won’t necessarily cut it – lots of employees have their own small work tools.
- Does the buck stop with you? Are you the person who decides on what work is taken on and the hours worked?
- Are the finances your responsibility? Are you paying for work premises? Are you the person carrying the financial risk for the success of the business?
- If a client is unhappy with the work done, is it up to you to deal with the problem?
Those who can answer “yes” to these questions should fit into the self-employed category. Be careful though as the definition has got a lot stricter in recent years. So if you’re working for a former employee, for instance, and that employer is your sole client, the tax office may take a dim view of you trying to say you’re self-employed.
Check your circumstances with HM Revenue & Customs before claiming the perks that go with being self-employed.