Hiring Self-Employed People to Work

Who Is A Self-Employed Person?

A Self-employed person is a person who runs his or her own business and himself is responsible for it’s success or failure. A Self-employed person is a custodian of all his business activities and is himself responsible for the profits & losses. A person can be both employed and self-employed at the same time. Many people operate a self-employed business whilst being employed at the same time. For example, someone may work for an employer during the day and run their own business as Self-employed in the evening. Self-employed workers don’t have the employment rights and responsibilities that an employee would have, and they are not paid through PAYE.

Employment Rights

Every working employee has employment rights under employment law. However, employment law doesn’t cover self-employed people in most of the cases. This is because their rights & responsibilities are decided in the specified terms at the time of contract with their client.

They are covered under few cases and the same are given below:

  • Protection for health & safety
  • Protection against discrimination

Also Read: Select Right Accountant For Contractor

Hiring Self-Employed People to Work For You in the UK

Working Out If Someone Is Self-Employed

HMRC may consider a person to be self-employed for tax purposes even if he or she has a different status in employment law. An employer should check whether the worker is self-employed or not. An employer can check this in the following ways:

  • Whether a worker is exempt from PAYE under tax law.
  • Whether a worker has employment rights under employment law.

There may be consequences if the employment status of a worker is incorrect. If someone’s employment status is wrong, an individual as well as the employer may have to pay HMRC unpaid taxes and penalties.

Also Read: How To Make Paye Payment To HMRC

Checking Whether A Worker Is Exempt From Paye

A person may be considered as self-employed and shouldn’t be paid through PAYE, if most of the following conditions written below are true:

  • They have their own business and are responsible for it’s success or failure, and the profit or loss that it makes.
  • They are the only decision maker and can decide what, when, where & how to do the work.
  • They can hire another person to perform the work.
  • They are responsible for fixing any unsatisfactory work in their own time.
  • They buy business assets, cover running costs and provide tools & equipment to workers by using their own money.
  • They can work for more than one client.
  • The employer decides a fixed price for their work and the price doesn’t depends upon how much time a particular job takes to complete.

Checking Employment Status

You can check someone’s employment status by online, phone or by post.

Checking employment status by Phone - To check employment status by phone, you can call HMRC on 0300 123 2326.

Timings Monday to Friday: 8:30am TO 4:30pm. Closed on weekends & bank holidays

Checking employment status by Post To check employment status by post, you can contact HMRC on the below address –

HM Revenue & customs Employment status customer service unit S0733 Newcastle upon Tyne NE981ZZ United Kingdom

Checking Their Employment Rights

A person may be considered as self-employed if they are exempt from PAYE, doesn’t have the rights of an employee and most of the following conditions below are also true:

  1. They are not under direct supervision while working
  2. They submit invoices after completion of the work
  3. They don’t get any holiday or a sick leave when they are not working.
  4. They are responsible for paying their own tax & national insurance.
  5. They put in bids or quotes to get work.
  6. They enter into a contract which has specified terms and words like “Self-employed”, “consultant” or an “independent contractor”.


A contractor can be a:

  1. Self –employed person
  2. An employee / worker if they are working for a client, and are employed by an agency.

Also Read: Contractor benefits

Note – It’s a duty of every worker or employee that they must tell HMRC, if he or she becomes self-employed

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


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