Am I employed or self employed

Andrew Boast
07/05/2020
47
4 min read
Am I employed or self employed advice from employment law friend

Am I employed or self employed is a question often asked for tax reasons, however the implications of not being an employee are far wider especially when raising a grievance with your employer or going to Tribunal. As an employee you have employment rights, however if you are self-employed you don't.

Employers can often enjoy the lack of clarity in this area to suit their circumstances often saying an employee is self-employed when they are in fact an employee. Whereas the legal position is that the self employed person is an employee with employment rights - especially if they have worked continuously for the same company for 2 years or more.

If you are self employed you might be working as:
  • A sole trader
  • A limited company
  • A partner in a business partnership

Employment Rights Act 1996


(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.


If you work for a company, you might be employed or self employed, check our quick comparison table below to see which one describes your work situation best.

Employee V Self Employed

Employee
Self-employed
You are paid for the time that you spend working.
You are paid for each job that you do, regardless of how long it takes you to complete it.
You are paid regularly by the same employer.
You send invoices for each job, and are paid a fixed fee by each client, customer or employer for each job.
You have a manager or supervisor who oversees your work.
You work without direct supervision.
You cannot send someone else to work in your place.
You can hire someone else to complete your work.
Your employer deducts your tax and NI from your wages.
You are responsible for paying your own tax and NI.
The business provides the tools, materials and equipment you use to do your work.
You provide your own tools, materials and equipment to do your work.
Your contract uses terms like ‘employee’ and ‘employer’.
Your contract uses terms like ‘self employed’, ‘consultant’ and ‘independent contractor’.

Both of these may apply to you if you own a limited company. For tax purposes, HMRC would class you as an owner and an employee, not as self employed.

Can you work for a company and be self employed?

You can be both employed and self employed if you have a steady job for an employer and do separate work for yourself.
For example: Talia is an employee, working as a teaching assistant during the week. At the weekends she runs her own business building and selling bespoke bicycles, for this work, she is self-employed.

Frequently Asked Questions
As we've seen in Section 230 part (1), if you were an employee whilst the company was trading then you are still classed as working for the employer as an employer after your employment has ceased. This means you can bring about an employment claim should you feel that your employer has breached your contract.

Having a dispute with your employer?
Get in contact with us and see how we can help.

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Check whether you are employed or self employed for tax purposes at GOV.UK >>

This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice please get in contact and speak to your employment law solicitors.
 
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