Being self-employed

[Cathie!]

From reading another thread, it brought to mind what my neigbour told me about his daughter's salon and self-employed stylists.......don't know if this will follow through to the beauty/nail industry also.

The main jist of it is that she had a stylist who had been 'self-employed' in her salon for 4 years. The tax people came along, spent the whole day there and said that as she has been in the same salon for 4 years she is classed as an employee as the rules on sub-contracting changed a year or so ago.

They wanted to put a £31k tax bill on her....eventually got negotiated down to £9k....

Maybe someone else has some info on the changes to sub-contracting vs employing in the industry because it sounds like it could be a nightmare....apparently they are checking out all the hair salons in the area for this, rent a chair etc.

 

[hippy-chick]

Its a difficult one isn't it.

i was told by a tax officer that if you work at a venue for the same hours every week then you cannot be classed as self-employed.

the thing about being self-employed is that you work irregular hours.

I few of us worked in a holistic therapy centre, but we worked as and when needed and was no guarantee of work. The 2 receptionists however, had to become employees as they worked set hours and got a guaranteed wage.

Now, if you are paying rent, I really don't know how this stands.

 

[Cathie!]

Its a difficult one isn't it.

i was told by a tax officer that if you work at a venue for the same hours every week then you cannot be classed as self-employed.

the thing about being self-employed is that you work irregular hours.

I few of us worked in a holistic therapy centre, but we worked as and when needed and was no guarantee of work. The 2 receptionists however, had to become employees as they worked set hours and got a guaranteed wage.

Now, if you are paying rent, I really don't know how this stands.

I don't know either so thought I'd give it an airing to see what further info anyone has to help.

 

[Rosey]

I don't know the ins and outs of this (not sure if business link has further info??) but we were looking at a rent a chair option for a hairdresser that wanted to work with us, but was strongly advised against by my accountant as he said it was a very grey area, and that people were beginning to get pulled up on this. A self employed person doing regular hours is considered PAYE. He said that VAT are cracking down because it is a way of staying under the threshold and PAYE are also cracking down too. So we havent done it - I just don't want the hassle! Sorry I wasnt much help, but this is what i was advised.

 

[Susie H]

Good grief the tax bandit doesn't miss a trick
I would think and this is just common sense talking here, that so long as the salon owner has declared your rent and you declare that your hours are your own depending on your bookings then there's not a lot the TB can do. If that was my place that had been hit that would be my appeal, BUT, how many owners declare the rent from the table?
Don't yell at me for that I know a lot do but that will be the TB thinking.

 

[oey]

I think another one of their rulings too is that if the salon owner supplies the products used then you are employed. This is where alot of techs who rent tables need to be very very careful.

 

[Rosey]

Yes - if the salon owner supplies products, or you have the use of a junior or receptionist - this is a problem. Its a total minefield - if the vat say the salon owner has taken self employed stylists to keep under the threshold then apparently they can go back seven years - double it and with interest!! Very scary

 

[gillian w]

All you need to do to get clarification is ring inland revenue on their help line.They are not at all scary and dont come after you once they know your name in fact you dont even have to tell them
What i do know is you must supply all your own products and there may be a problem if you are working in the same place all the time.They may then go into it a bit more.

 

[Cec]

We have this same problem in Norway too, but I don't know if it's the same rules. Here in Norway people DO rent out chairs/rooms too. The rule is this: If it looks like you could have been employed and not freelance (if you have the same hours every week, and, this is important, you have only ONE place to stay. If you work freelance, you have more than one place to stay), you can get penalties because they will think you try to get away with "employment taxes" (the taxes an employee has to pay for a employer). It's tricky...

C.