Oh, and you will be self employed

Goldenstar said:
Both my grooms are freelancers .
They do work for other people, they vary their hours and days to fit in with their other work and interests they both have their own horses so they work around them .
IME lots of people want to work like this with horses they don't want to tied to one yard being paid for 37 hours and working 57 , neither of them work "full time " hours
I needed some extra hours recently as one was away and the other did not want the hours so I employed a third freelancer I know .
But it does sound like this was what being advertised in this case.
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please be careful, if they work for you regularly they could be seen as employed by HMRC. if they are there on a weekly basis you may be at risk. it's worth checking out to be sure. they could work a zero hours contract and have the same flexibility.
i'm in the swimming business and its very similar
 
If the grooms are using your equipment, facilities and are regularly used by you then they will be viewed as your employees.
I had a groom for a while, but she had lots of different clients, times varied significantly, most horse work was emergency or holiday related, she did not work for anyone on the same basis week on week. She also did marketing, though I don't recall an invoice as such, she had a record of all visits, charges and I paid every week, either by cheque or by cash.
I have a small business and people have some strange idea if they pay me cash I will give them a discount, as they think I am trying to avoid paying tax, well no........ all my clients have the choice to pay by bank transfer or cash on the day of invoicing, why should they get a discount for paying cash. I don't give discounts if they ask for one. I have regular clients but I work my own hours, I rarely make an agreement to go at the same time and I don't ever work for so many hours, effectively I charge by the job, therefore I am self employed, there can be no doubt as long as I stick to these guidelines. If I worked for one customer every week for an hour all year, and used their equipment, HMRC would consider me to be employed by this person.
 
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It is not correct - they are advertising a job but then telling the applicant that they will be self employed. To be self employed the worker will have to register with HM Revenue & Customs as such and issue invoices to the people for whom they they work. However many many yards in the horse industry operate on this basis. I have employed, and do employ staff on a self employed basis to cover permanent staff absences, holidays and busy periods and I pay these staff on receipt of their invoice. I also employ full time permanent staff and pay their NI, do the payroll and fund the statutory 28days/year minimum holiday. However this costs me a lot - a considerable amount because the HM Revenue system is now so complicated that I can no longer do the payroll myself and I am by no means alone in this.(I had done payroll for over 40 years with no problems) I now employ a payroll expert to do the job and it will not get easier with pensions coming along too. I know of several employers who have reverted to self employed and/or cash in hand because they could not cope with the Revenue on line filing system which continually fails to operate properly. At one point I spent three whole days trying to file my annual return on line with the Revenue constantly telling me I was using commercial software and not their inter active web site. They did not know how their own web site worked!! I am not a business as such and I employ grooms to help me with my horses - actually I would like to do the horses not spend all my time on the payroll and the Revenue helpline. The Revenue should make it easier for small employers to be legal or they will pay the price. Yes of course staff in the industry must expect to be paid and looked after in accordance with the law. Please just remember that all these costs will add to YOUR livery bill so be prepared for some substantial increases in the near future!!
 
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This is a very interesting thread. I have often thought that this practice was dodgy but I am no expert and definitely don't know any facts. However, on the yard my horse is at, the grooms have set hours and pay by the yard owner but they say they have to be self employed. Doesn't seem very fair to me. I know that yard owners say it is a very difficult business to make money in but IMO that does not give them the right to exploit people.
 
In no way is the job applicant self-employed, McDuff explained it very well. Goldenstar's use of freelancers seems correct to me. A long while ago now I used not only to investigate and rule on this type of thing, but also train my newly employed colleagues I this. It made for a very interesting job.
And another thing, presumably the fee involved is low, so if the groom deducts costs such as Class 2 NI, materials purchased and used to do the job, and personal insurance to cover themselves for varying liability the net result would be that the yard would also be paying below the Minimum Wage. The modern HMRC publishes a list of such employers, once discovered, and some of those had only underpaid by £100 or so. Not good publicity.
 
HMRC are cracking down heavy these days on contractors/self employed people who are basically employees avoiding tax and the companies who contract them. It is wrong as HMRC lose a lot of money from this. There are ways of anonymously reporting people to HMRC who will investigate and I encourage you to do this. Try to get a copy of the job advert to send them.
 
california dreaming said:
This is a very interesting thread. I have often thought that this practice was dodgy but I am no expert and definitely don't know any facts. However, on the yard my horse is at, the grooms have set hours and pay by the yard owner but they say they have to be self employed. Doesn't seem very fair to me. I know that yard owners say it is a very difficult business to make money in but IMO that does not give them the right to exploit people.
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Its not even the exploitation, HMRC are not so concerned with that as with their loss of income, however the YO is an employer, there is no doubt, and as reported previously wil be liable for up to 12 years of back payments, it is just not worth it for either party. It will come to light and no one should accept these terms and conditions. I believe all employees need a contract of employment, and there is the matter of insurance ............. both life threatening and short term illness.
 
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The business I work for employees contractors regularly, all legally and some have been there for years. They also use the company's equipment when there (contracted designers certainly don't cart their own test and development lab with them, nor project managers their own software).

However, they quote their rate (or usually the agency involved does), and the company agrees to pay it (though they may negotiate). They bill for the hours worked at the end of each month (or week if that is the arrangement), and they often also bill for travelling time and other incidentals. They are responsible for their own tax and pension etc. And if they're sick then they don't get paid.

Their wage is usually higher than that of full time staff. If a potential employer asks you to be self employed then you can quote them your rate and inform them that they cannot hold you to any particular hours of work. If yards got that response often enough they would stop doing it. These are things that kids could do with learning in school and parents should help insist on. It's hard being a young groom.
 
DabDab said:
The business I work for employees contractors regularly, all legally and some have been there for years. They also use the company's equipment when there (contracted designers certainly don't cart their own test and development lab with them, nor project managers their own software).

However, they quote their rate (or usually the agency involved does), and the company agrees to pay it (though they may negotiate). They bill for the hours worked at the end of each month (or week if that is the arrangement), and they often also bill for travelling time and other incidentals. They are responsible for their own tax and pension etc. And if they're sick then they don't get paid.

Their wage is usually higher than that of full time staff. If a potential employer asks you to be self employed then you can quote them your rate and inform them that they cannot hold you to any particular hours of work. If yards got that response often enough they would stop doing it. These are things that kids could do with learning in school and parents should help insist on. It's hard being a young groom.
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This is the same where I work....surrounded by them!
 
Yardbird said:
And how many people are employed on this basis, but can not report it as it will rock the boat and they fear being jobless.
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They may fear for their jobs, but they should also be fearful of being caught for not paying taxes, in some situations they could be required to pay all that is owing immediately. Also, they won't be adding up the necessary amount of years paying into the system in order to get a full pension when they finally retire. The system is there also to protect, not just as an annoyance.
 
DabDab said:
The business I work for employees contractors regularly, all legally and some have been there for years. They also use the company's equipment when there (contracted designers certainly don't cart their own test and development lab with them, nor project managers their own software).
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I'm self employed (IT) and in that position and the companies I work with (media) use a lot of freelancers. I use their equipment and I wouldn't be able to choose my own working hours as I need to be flexible and work around their requirements and their availability. They often have a set daily or weekly rate for certain roles.

However as said with HMRC wanting to crack down on self employed there is a certain responsibility on me as a contractor or freelancer to establish my self employed status rather than a company telling me I am. The big companies check my status as they don't want to get into trouble. It can be quite a complex area.

Potentially someone could be a self employed yard worker or groom thought usually they would have multiple clients or do fixed term jobs however they would need to be fully responsible for their own tax and NI contributions and the first thing they would need to do is contact HMRC and register. They will ask the relevant questions and if they decide your friend is not self employed, she can take it from there.
 
This "you work for us, but are self employed" used to be common in the building trade, amongst others.

If you are turning up for one employer, and working the hours they set, and using their equipment and you have no other clients, then obvioulsy you are an employee.
 
Bonkers2 said:
They need not fear joblessness, the horses still need looking after.
Not every school leaver will take a job like this, they may even, innocently mention it to someone who will report it.
Their parents will be aware that any employee has a payslip.
As I say, I suspect those who do this are generally those who are on benefit and who are "colluding" to commit fraud, but fraud it is. They will be asked to re pay all benefits immediately or face prosecution.
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How on earth did this become about people on benefits?

OP was about YO who are defrauding the rest of us and the 'employee' by trying to get out of their responsibilities for paying NI contribution and administering PAYE appropriately. this used ot be common in the building trade but was outlawed several years ago.
 
Pearlsasinger said:
How on earth did this become about people on benefits?

OP was about YO who are defrauding the rest of us and the 'employee' by trying to get out of their responsibilities for paying NI contribution and administering PAYE appropriately. this used ot be common in the building trade but was outlawed several years ago.
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It's not about people on benefits, but loads of people are on some sort of benefit which they would lose if they reported their earnings, this is the only reason someone would have to "collude" with an employer, otherwise they are far better reporting the employer, and getting it all sorted. If they decide to register as self employed, the HMRC will probably decide they are employed and will tell the employer to pay up. The last thing anyone wants is an HMRC inspector knocking on the door.

If OP later goes to claim a benefit [includes a pension], they will be asked about their last employment and it will all come out. Someone working a few hours a week cash in hand may be able to keep under the radar, but as soon as they apply for anything which is part of the benefits system, it will all come out, if they lie, then they are colluding, what else can it be termed?
 
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Bonkers2 said:
this is the only reason someone would have to "collude" with an employer, otherwise they are far better reporting the employer, and getting it all sorted.
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nonsense, this is more about young people not knowing and being exploited and being desperate for work. When you are fresh out of school, your future pension payments are the last thing on your mind. I daresay there may be some out there deliberately 'colluding' but most won't know any different. It has always been the same in the horse industry and doubtless always will be.

And if anyone is at a livery yard and please at how reasonable it seems to be price-wise and yet you know staff are being treated like this, well shame on you too.
 
MotherOfChickens said:
nonsense, this is more about young people not knowing and being exploited and being desperate for work. When you are fresh out of school, your future pension payments are the last thing on your mind. I daresay there may be some out there deliberately 'colluding' but most won't know any different. It has always been the same in the horse industry and doubtless always will be.

And if anyone is at a livery yard and please at how reasonable it seems to be price-wise and yet you know staff are being treated like this, well shame on you too.
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I think I covered this in an earlier post, its not just about pension, its also the payments when sick or out of work, the parents know even if the child does not. I think everyone knows if someone is paying cash in hand, no paperwork, there is something wrong. At some stage everyone has to apply for a NI number, once this is done, they are in the system.
Its not only school leavers, because most employees/yard persons I have seen have been experienced horse handlers, and over 21. To take on school leavers with no experience is pointless,, they are a liability and need constant supervision.
If the "child" goes to the Jobcentre at some later stage, as is inevitable, they will spill the beans, however innocently.
 
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Just to clarify, only foreign workers apply for a National Insurance number these days.

A child resident in GB all its life and approaching 16 is automatically sent their number, and since Child Benefit has been paid for all children ,very few teenagers have failed to get caught by the system these days.
 
criso said:
I'm self employed (IT) and in that position and the companies I work with (media) use a lot of freelancers. I use their equipment and I wouldn't be able to choose my own working hours as I need to be flexible and work around their requirements and their availability. They often have a set daily or weekly rate for certain roles.
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I did this and to do it with regular hours for the same firm I had to set up a limited company. My company then billed them for the hours I worked and I was paid wages from my company. Bit of a palaver but at least it made it all legal.
 
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I worked on a yard. Had set hours and a set wage - no room to negotiate either. I was paid holidays and not sure about sickness as I was never off sick.
I was young and had no idea about statements of employment, NI, tax etc. I had no idea it was illegal or that I was even self-employed. It was one of my colleagues who advised me to register self-employed etc. I've been on several yards and only one was legal.

A lot of school leavers etc are not in contact with their parents, law and how they're paid doesn't come up etc. so a lot of information is missing from being passed on to those who need to know.

Bonkers: "To take on school leavers with no experience is pointless,, they are a liability and need constant supervision."
I would much rather employ a school leaver who has had experience helping on yards etc rather than some adults. I certainly was never supervised when I was on a yard out of school and had other older employees under me.
 
It is legal yes...you do not have to employ people however, if the role is full time they may well get themselves in the tax man's radar because they do not like full time self employed. They are entitled to offer a self employed contract, however the person needs to ensure that the rate they are being paid takes into account that they will be paying their own NI, tax and holiday pay out of it. So I would expect the rate of pay to be higher than for a normal equilivent employed job. I also think it would have been nice for the advert to have reflected the terms of the contract, so for me, that would ring alarm bells about how I would be treated and valued working for such a company.
 
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