Self employed or contracted?

[Pixie28]

Hi

About to start in a new salon self employed. Just a little confused as the person in charge says it is more "contracted".

Basically.....

I do my own tax
They take payments and I invoice them for what they owe me (50:50 split)
I provide most of my things but they provide other equipment etc
If I need a day off, I have to check with them as they will need to provide cover.

A bit strange to me. Spoke to my other half and he said it's quite normal at his work and they have lots of contractors who do a similar thing.

Is this above board?

Kate x

 

[LAPirate]

They are blurring the lines... Have they asked you to provide your own insurance? Is there a uniform? If you're expected to stay all day with no clients you'll earn zilch? I'd say no thanks and look elsewhere...

 

[BannerPenguin]

Yes but it's not self employed. It's sub contractor. Which is kinda the same thing and technically you can still take the day off whenever you want.

 

[Pixie28]

We'll they haven't mentioned the uniform but the other girl who is self employed wears a uniform.
I have to provide my own insurance. Just ringing alarm bells for me, but I really need the money and the work!

 

[Myarka]

As far as HMRC is concerned, you are self employed and should be working in accordance with their guidelines:

VTAXPER69100 - Particular trades: Hairdressing: Guidelines agreed with the National Federation of Hairdressers

 

[aimeelouise93]

Im about to start a job like this! Ill be working 50/50 however i just provide my own tools, scissors and bits that i like using.

I will do my own tax and NI however i think i may be covered insurance wise as i will be working in salon, need to double check with her as i start tomorrow.

Find out some more ins and outs of it, from everyone ive spoke to going self employed has been the best thing they ever done. It may be the same for you
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[AcidPerm]

Regardless of what the salon owner says, you MUST purchase your own insurance.

Working self employed you can be sued by a client directly. They don't have to involve the salon and some insurers include free legal advice.

It's not really very expensive and will be worth it for peace of mind plus you're covered if you do any work outside the salon too.

 

[Myarka]

Working self employed you can be sued by a client directly. They don't have to involve the salon and some insurers include free legal advice.

I don't think that can be emphasised enough, self employed means it's a separate business from the salon.

 

[aimeelouise93]

Ill be finding it all out tomorrow from her and the other staff as to what they do. Being 50/50 im not entirely self employed as i have to split my profit to go towards the running of salon,juniors,products etc.
But i wouldnt be working without insurance, just never thought whether i would have to sort it or whether the owner would have anyone working in the salon covered by her own public liability xx
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[BannerPenguin]

Ill be finding it all out tomorrow from her and the other staff as to what they do. Being 50/50 im not entirely self employed as i have to split my profit to go towards the running of salon,juniors,products etc.
But i wouldnt be working without insurance, just never thought whether i would have to sort it or whether the owner would have anyone working in the salon covered by her own public liability xx
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You are still fully self employed. The 50% is merely a commission your paying to the salon to be there, therefore you'll still need to do your own insurance and accounts

 

[molemaid]

My hairdresser and nail technician both work in my salon on this basis. I provide all the products and all of the equipment (except for the hairdresser who uses her own scissors and brushes) and we have set the prices together. They both work their own hours and days and if a client pays cash we spilit it there and then and if a card payment they invoice me at the end of the week. They wear what they like and one choses to wear a uniform one doesnt. It works well for us x

 

[aimeelouise93]

My hairdresser and nail technician both work in my salon on this basis. I provide all the products and all of the equipment (except for the hairdresser who uses her own scissors and brushes) and we have set the prices together. They both work their own hours and days and if a client pays cash we spilit it there and then and if a card payment they invoice me at the end of the week. They wear what they like and one choses to wear a uniform one doesnt. It works well for us x

Would you have any advice on doing it this way? Im so new and wouldnt be sure what exactly to ask her regarding tax, NI, insurance?

Would be nice to have advice from someone who has staff doing it this way!

She explained that she would let me know each week how much roughly to set aside for my tax at the end of the year. Insurance was thing i never thought of as i did think it would be covered by the salon. I start tomorrow so i will need to get it sorted today?!

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[LAPirate]

Even if your employers say you are covered by their insurance , you're not! The insurance company wouldn't pay out for you! Believe me! I learnt this the hard way...

 

[sdsurge]

I have been reading these threads for a long while now without ever saying anything.

However I am still amazed at the number of advice that is given where people complain about basic things like wearing a uniform, or the need to inform someone that you're on Holiday, etc. Do you have any idea how many Salons close or are up for sale? Do you ever wonder why?

Wearing uniforms or making sure that their is enough cover in the salon is not because it is blurring the lines. But simply, it creates a professional and well run salon. The image of the salon and the appearance of a well run establishment makes a great deal of difference. Furthermore, suppose all the staff co-incidentally decide to have a holiday on the same day? That would look great wouldn't it?

Think about it people. Be professional, act professional, think professional.

 

[AcidPerm]

I have been reading these threads for a long while now without ever saying anything.

However I am still amazed at the number of advice that is given where people complain about basic things like wearing a uniform, or the need to inform someone that you're on Holiday, etc. Do you have any idea how many Salons close or are up for sale? Do you ever wonder why?

Wearing uniforms or making sure that their is enough cover in the salon is not because it is blurring the lines.

I appreciate your sentiment but it can only apply to salons in the UK where staff are fully employed by the Salon owner.

The fact is that HMRC will use evidence of salon managers requiring staff to wear uniforms, work specific hours/days as proof of a sham arrangement to avoid paying tax, NI, holiday pay etc by calling 'staff' self employed.

The link that Myarka posted from the HMRC website clearly explains this.

It is vital that hair & beauty professionals understand the demarcation between employed & self employed so that they do not risk prosecution. HMRC have far greater powers than the police!

 

[sdsurge]

I appreciate your sentiment but it can only apply to salons in the UK where staff are fully employed by the Salon owner.

The fact is that HMRC will use evidence of salon managers requiring staff to wear uniforms, work specific hours/days as proof of a sham arrangement to avoid paying tax, NI, holiday pay etc by calling 'staff' self employed.

The link that Myarka posted from the HMRC website clearly explains this.

It is vital that hair & beauty professionals understand the demarcation between employed & self employed so that they do not risk prosecution. HMRC have far greater powers than the police!

Yes I understand HMRC regulations. However, there is a clear demarcation between a salon owner telling staff that they must wear uniforms, and the staff making a collective choice to wear a uniform. Furthermore, it's a bout good record keeping and management. Where self employed staff make a collective decision such as wearing of uniforms and hours worked, getting them to sign a document stating this, would suffice. As it clearly shows they in their capacity of self employment have made this decision at their own free will. The problem arises when there is no way of HMRC knowing or having any proof.
Good staff should want to ensure that the salon is a best run as possible, and they should be willing to agree collectively and sign collectively every decision that they have agreed to. Much the same as Board of Directors sign of minutes of meetings.

 

[taggyboy]

If you're self-employed you do the following:

Run your own business
Have your own client base
Take your own money
Book your own clients in the diary (computer)
Work the hours you want
Take holidays when you want
Dictate your own prices
Have your own accountant, (if you feel necessary)
Register for a (UTR), Unique Tax Reference with HMRC. This shows you are self-employed and should be quoted on all invoices for rental costs.

None of the above has anything to do with a salon owner.

If you decide to have holidays or be off sick, the self-employed person is responsible for letting their own clients know.

Most therapists I know do wear a uniform. However, I don't think many stylists do or if they do it is usually based on smart appearance and maybe a colour. i.e. black. Whatever the self-employed person decides, it should be their decision, not the salon or owner.

All you are doing as self-employed is renting a space in a salon for a fee!

You also need to check when renting that the salon owners landlord is aware as this is sub-letting and many landlords do not allow this.

There are probably a lot of other things I have missed off as rushing to reply between clients.

I hope this helps a little.

 

[AcidPerm]

Legal stuff aside, I also think that one of the biggest problems is that most clients have no idea that the stylist is self employed. They see the salon as one entity rather than separate businesses.

So, if they're no longer happy with slapdash Babs doing their hair, they complain to their friends and go elsewhere.

It's not just the Salon owner that suffers but potentially the other self employed stylists who work there getting tarred with the same brush. :irked:

With regards to salons closing down....I also firmly believe that too many people open a salon without having the first clue about good business practice, managing staff, promoting the business etc. Some will learn quickly and the business will thrive whilst many others resort to moaning loudly hoping someone else will resolve the problems for them.

 

[LAPirate]

This is a minefield... HMRC are actively investigating salons for these very reasons.. We recently had an inspection based around self employment and Vat..
Many salon owners are using this blurred vision of self employment to purely escape NI , PAYE and VAT.. The rules are clear , you can make of them as you wish.. You're staff If unhappy can have HMRC Pursue you for back holiday and indeed wages if it can be proved they have earned less than minimum wage..
How can you expect a purportedly "self employed " member of staff to stay for a full day with no clients therefore earning no money?