5 ms·

I'm curious: Could you not simply designate the new hire a 'contractor' since they are working from their own premises? You could then save having to deal with

by MarkMc 15y ago

I'm curious: Could you not simply designate the new hire a 'contractor' since they are working from their own premises? You could then save having to deal with all the employee paperwork and insurance...?

tomgallard 15y ago
You have to be pretty careful with this sort of thing. You can't just say someone is a contractor and they become so. This is covered by something called 'IR35'. What this basically says, is if someone looks like an employee, they're doing the job of an employee, then they are an employee, whether you like it or not. Most UK IT contractors will be pretty familiar with this situation, and the ways to avoid being caught out by it. However, as my employee is mostly customer service, admin etc, and doesn't work for anyone else, I don't think there's a way round it for me!
- zedwill 15y ago
  I wonder if this IR35 issue also extends to other european citizens working as freelancers. I know nothing on UK law, but common sense dictates it does not forbid hiring other europeans. It might be possible to hire remote freelancers based on other european startup hubs without being affected by IR35.
- pwaring 15y ago
  IR35 is not quite the same as whether someone is employed or a contractor - you could claim to be a self-employed contractor when working from home and IR35 would not apply. If you did that then it would be a question of whether you were employed or self-employed, and that would determine which forms of national insurance contributions were paid (your income tax would remain the same). IR35 was introduced to stop contractors from setting up a limited company and then having the company contracted instead of the individual. The individual would then take dividends out from the company, which are taxed at a lower rate and not subject to national insurance. http://www.hmrc.gov.uk/ir35/ http://www.hmrc.gov.uk/ir35/
swalberg 15y ago
http://www.hmrc.gov.uk/employment-status/index.htm#1 http://www.hmrc.gov.uk/employment-status/index.htm#1 would seem to indicate that it's similar to Canada & USA -- if the employer has control over the hours and way the work is performed, you don't get a choice over the employment status. The location really doesn't matter.

by MarkMc 15y ago

tomgallard 15y ago

You have to be pretty careful with this sort of thing. You can't just say someone is a contractor and they become so. This is covered by something called 'IR35'. What this basically says, is if someone looks like an employee, they're doing the job of an employee, then they are an employee, whether you like it or not. Most UK IT contractors will be pretty familiar with this situation, and the ways to avoid being caught out by it. However, as my employee is mostly customer service, admin etc, and doesn't work for anyone else, I don't think there's a way round it for me!

zedwill 15y ago
I wonder if this IR35 issue also extends to other european citizens working as freelancers. I know nothing on UK law, but common sense dictates it does not forbid hiring other europeans. It might be possible to hire remote freelancers based on other european startup hubs without being affected by IR35.
pwaring 15y ago
IR35 is not quite the same as whether someone is employed or a contractor - you could claim to be a self-employed contractor when working from home and IR35 would not apply. If you did that then it would be a question of whether you were employed or self-employed, and that would determine which forms of national insurance contributions were paid (your income tax would remain the same). IR35 was introduced to stop contractors from setting up a limited company and then having the company contracted instead of the individual. The individual would then take dividends out from the company, which are taxed at a lower rate and not subject to national insurance. http://www.hmrc.gov.uk/ir35/ http://www.hmrc.gov.uk/ir35/

swalberg 15y ago

http://www.hmrc.gov.uk/employment-status/index.htm#1 http://www.hmrc.gov.uk/employment-status/index.htm#1 would seem to indicate that it's similar to Canada & USA -- if the employer has control over the hours and way the work is performed, you don't get a choice over the employment status. The location really doesn't matter.