Guest blog by Katherine Connolly
of Keeping HR Simple
Last week I posted a blog on the accounting implications when your boss asks you to go self employed.
Today Katherine Connolly of www.keepinghrsimple.co.uk has kindly agreed to look at your rights as an employee if …
Your boss has asks you to go self-employed
That’s the very first thing you should do because you need to understand the reasons behind the request. Often it may be the case that your employer needs to save money and the Employers National Insurance he or she pays for you is one area where money could be saved.
Understand your options
There are three ways to respond to this request. The first is to agree, the second to disagree and the third is to propose an alternative solution (once you’ve understood the reason behind the request that is).
Before you agree to go self-employed, you’ve got to understand what that means and what impact that will have on your personal circumstances and most importantly, your finances. There are some key indicators HMRC will apply in order to determine whether or not you are truly self-employed:
- You can decide how & when to provide the assigned services
- You make a profit or loss
- A fixed price is paid to complete the services regardless of time taken
- You can hire others to do the work at their own cost
Or if most of the following applies then you may still be considered as being self employed:
- You provide the ‘tools’ needed to complete the work and use your own funds for any costs incurred to complete the work
- Any issues with the services delivered have to be rectified at your cost
You may not want to change your employment status at your employer’s whim. However, before you refuse the request, you should understand the consequences of that decision. It may mean that your employer will consider redundancy as an option so it’s worth knowing what the alternatives are in your employer’s mind.
Propose an alternative
Having the information in advance means that you know why your boss has made the request and what he or she is considering instead if you refuse. If you can propose an alternative which would meet your employer’s needs but ensure that