CIS Payroll

Self Employed Status

Self Employed Status


If you want to take advantage of self-employed tax status and benefit from the freedom and flexibility that comes with it then the terms of your contract will determine your options. There are four main factors that are typically used to determine your employment status and whether you are considered “to be in business on your own account”.

The first is control or more specifically the right for others to control how you go about the work you do. To be self-employed you will typically decide how you complete given assignments within a general specification and will have the freedom to complete assignments, within any framework of general health and safety and other such requirements. Also you will not be obliged to complete extra tasks outside of those agreed without your agreement.

The second is substitution and means that to be self-employed you are often not forced to do the work yourself and can send somebody else of at least equal qualification and experience to complete all or some of any assignment for you, you will still be paid and will then have to pay any substitute/helper yourself.

The third key indicator is mutually of obligation and just means that a self-employed person has the right to refuse to work at any time but equally has no right to demand work or commitment from any work provider.

Finally any determination of your status may look at your exposure to risk and/or your opportunity for reward from the work that you do. As a self-employed person you may be able to profit more from good or efficient work as you might suffer financial loss as a result of your contracted assignment overrunning or not being completed. It is very important to note that it is not necessary for all of the above to be present to make your contract one of self-employment.

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