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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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Afternoon, I run a temporary employment agency (catering).

Customer Question

Afternoon, I run a temporary employment agency (catering). We run our PAYE in-house. We also have some self-employed chefs on our books, and pay about 6 chefs a week in this way. All our self-employed chefs have a UTR and Public Liability Insurance. Our process is that they quote us job and then invoice us at the end of it.
I know that employment law changes all the time and some agencies have started to refuse self-employed workers unless they go through an umbrella company. I was just wondering
how HMRC would view our process and if we need to insist our chefs use an umbrella company also.
Are we too exposed in our current way of doing things?
Thanks,
Chloe.
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
,
Actually as long as the chefs in question remain independent in their work then there should still not be an issue.
Not to over simplify but if the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed:
Can they hire someone to do the work or engage helpers at their own expense?
Do they risk their own money?
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide ?
Do they agree to do a job fixed price regardless of how long the job may take?
Can they decide what work to do, how and when to do the work and where to provide the services?
Do they regularly work number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense?
The Unique Taxpayer Reference (UTR) is only issued by HM Revenue & Customs (HMRC) when the person has registered Assessment.
I do not see a need to change.
Customer: replied 2 years ago.

TaxRobin,

Thanks answer. I suppose it wouldn't be yes to all of those answers. Although we have a quote work, ultimately the job is hourly paid and is logged on a timesheet signed by the client so can vary from the quote. The chef would provide their knives and uniform but nothing else. They also cannot hire anyone else to do the assignment as they have been given it based on their skills. The only risk to their own money is that they might not be able to find work every day.

They do regularly work agencies and venues though.

Expert:  TaxRobin replied 2 years ago.
Chloe,
Yes, that situation is more unknown than known.
I would have to say then that the only true way to know how HMRC would judge would be to let HMRC judge.
Some agencies will provide a PAYE scheme. This alleviates the requirement umbrella company but requires additional capability within the organisation including professional accountants and adherence to fiscal laws. Most agencies elect to utilize an umbrella company.
I, in my determination that would mean nothing to HMRC, think you are fine in your position.
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