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How to know whether the operatives you deploy are employed or self-employed, and what this means for tax and national insurance.

Contents

You need to know their employment status

Part of the amount of tax and national insurance you must pay to HM Revenue and Customs (HMRC) depends on the ‘employment status’ of the operatives you deploy – that is, whether they are employed or self-employed.

You should check their employment status in both of the following:

• employment law – to see whether they have an employee’s rights
• tax law – to see whether you are responsible for PAYE and National Insurance contributions

You and they may have to pay unpaid tax and penalties if their employment status is wrong.

Use the guidance HMRC provides

HMRC provides guidance and tools to help you work out if someone is employed or self-employed.

You should:

Think about the contract

You need to work out whether the contract you have with the operatives you deploy is a contract of service (employment) or a contract for services (self-employment).

Contracts may be written, oral, implied or a combination of all 3. This means that the contract may not be defined in just 1 document. It can include:

• any instructions,...

Read Full Story: https://www.gov.uk/guidance/learn-how-hmrc-rules-apply-to-the-security-operat...