When you take someone on in your business, you will need to determine whether they are an employee, or self-employed. This is a complex area, because there is no statutory definition of ’employment’ or ‘self-employment’. The consequences of making an incorrect decision can be very serious indeed. You may be liable for not only the employer national insurance contributions (NICs), but also the amounts of tax and NICs that would normally be borne by the employee if you incorrectly treat someone as self-employed.
In particular, it is not possible for an employer and employee to agree that someone is not an employee. If the work has the nature of employment, that is how it should be taxed.
Because large amounts of tax and national insurance contributions can be at stake, GRA can take a firm line, so obtaining advice specific to your business is essential. However, you need to seek advice before you engage workers, so that we can advise on the best strategy and engagement terms to suit your business circumstances.