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Self Assessment Returns

Countryside Accountant, Linda Baharier can guide you through the minefield of knowing when you should declare yourself as being self-employed. The dividing line between employed and self employed.

Whether you are employed or self-employed is not necessarily as straightforward as you might think. You might even assume that you are free to choose, but HMRC stress that the rules don't necessarily state that. Basically, this comes down to whether you are a sub-contractor or a member of staff.

There is no simple, clear-cut answer to whether you are self-employed or not. HMRC have published a helpful leaflet which you can use to work it out. This leaflet (ES/FSI employed or self employed?)contains a questionnaire which helps you determine the nature of your working relationship.

These questions are aimed at the technical details of aspects such as: who has final control of the work, where responsibility for materials and equipment lies, your integration with your employer and even what the intention is between the parties. On top of that, they also consider what the usual conditions are in your specific industry. It is important to be aware that this is covered and defined by general employment law, rather than being an aspect of tax legislation and regulations.

For employers it can be a tempting strategy to reduce costs by taking on former employees as self-employed contractors. This can be a very good idea, saving you money on the cost of wages and benefits as well as tax, but there are dangers if you don't follow the correct procedures.