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Agencies stopping PAYE - asking you to be self employed

Discussion in 'Supply teaching' started by robyn147, Oct 21, 2011.

  1. Several people on here have said agencies have made them go self employed. Taken from the HMRC website.
    Is a supply teacher self employed? I don't think so but I'm sure HMRC will have their opinion. I think agencies are just trying to avoid AWR commitments.
  2. My agency told me it was to make me exempt from AWR. I have taken on a potentially long term contract too so don't want to rock the boat. It's up to the school apparently if the want to stop you working but I believe that it can be in any school in an LEA to make the regs count or even just half a day a week in one school.
  3. Anonymous

    Anonymous New commenter

    Do you think you are self employed on a long term contract?
  4. I think it is a tax fiddle which could get closed in future if the government scrutinises it closely.
  5. Well it's tricky. I worked for an organization who employed 0 hour contract staff, staff on certain hours and also freelancers. The organization contracted the freelancers for varying lengths of work and the were self employed. I am also now working self employed for them as and when they have work. They are not an agency but I do sign a schedule of work for each job which is paid hourly. Music services also employ staff on a self employed basis too. I guess the agencies are doing the same as other organizations. This is why I am confused. I will now do my own tax return.
  6. jubilee

    jubilee Star commenter

    They're doing it so thta they don't have to pay employer's National Insurance and won't have to implement the new regs for agency workers as, technically, you won't be an agency worker any more.
    In my book, self-employed people set their own rates and invoice their customers. They can also administer their own pay and not have to pay an umbrella organisation to process their payments.
    If you end up paying self-employed NI contributions, you will be disenfranchising yourself from certain State benefits in the future.
  7. This clears up the matter it is guidance from the REC the body that regulates agencies and the DfE.


    In short agencies will not be able force supply teachers through this route to try and avoid AWR.
  8. Dangerous stuff indeed. Let's face it, we all get involved in a bit of tax fiddling and being naughty but we do so knowing that we'd better prepare for the eventuality that we are investigated. If HMRC find that you have been naughty, they will hit you very very hard indeed and they are very very nasty. Ignorance is not an excuse. A while ago those awful people in parliament got jealous of IT freelancers and decided to make a bit of legalese to punish them. It is called IR35 and applies to anyone who is "self employed" yet works for "one employer". "Ahh" You say. "I work for many schools as a supply teacher". No, you work for one LEA. The buck stops with a limited company, as far as I remember. If you are a sole trader, the company who employ you (the agency/pimp) will be in breach of IR35 if they don't deal with your PAYE, then they get hauled over the coals (and as a member of staff, who knows what happens to them, but the company will get a big fine, which is why certain big agencies do the following)...... An agency will take you on as a limited company (one man) as you then are responsible for your tax, and paying it! If they think IR35 applies, they can whack a figure on you and say "pay it" and if you don't all sorts of nasty things happen.

    The bit I like best is that whilst IR35 applies to people who are often struggling, MPs don't seem to have to pay tax on their "expenses". Since they have one employer, "US", you'd think they would. But, oh no. Freaking cunits. GRRRR
  9. Well I am self employed registered and sort my own tax but can't set my rate with the agency. I am a sole trader not a limited company. I technically could pick and choose what work I take but due to current climate I have taken the afternoon job daily but not on a contract so technically I don't have to go in when I don't want to but then I would loose the work so will be completing job as of on a contract unless I get my other work requested at many times the fee but for a full day, and if I do the agency will need to send someone else.

    Not heard of the IR thing so will check it out. I am hoping the agencies are caught up by relevant bodies before I have to complain and risk losing work.
  10. Oh and I have a small earnings NI exemption for now as I was getting drips of work but will have to change that once I have earned the exempt amount but I might ask about paying my NI that employers would pay so not to lose future state benefits.
  11. I thought you could buy back missing contributions though so you don't lose out in future. Surely self employed people can still claim benefits later in life when they need to?
  12. Anonymous

    Anonymous New commenter

    I'm still unclear about being self employed. I appreciate that you can work for someone and can decline / accept it which is part of self employment.
    However - when at a school, you are clearly under the rules of a school. They tell you which class to do, times to do it, planning (sometimes), break times, assemblies and the Head can order you around. Clearly as if you were an employee.
    And what about employees' liablilty insurance?

  13. jubilee

    jubilee Star commenter

    Paying missing contributions does not entitle you to things like JSA Contributions based. You only get that from enough NI paid as an employee.
    It's the State retirement Pension that has traditionally been protected by paying NI voluntarily for missing years but the likelihood is that NI contributions won't be used for paying that out in the future and you only need 30 years of contributions at the moment, so paying voluntarily can be a costly mistake. people should get some advice or do somereasearch before coughing up for NI voluntarily.
    Self-employed people can't access the same benefits as others during their working/ unemployed stints. My father-in-law couldn't get State sickness benefit when ill for several weeks and unable to conduct any business (small scale printing0 despite having paid self-employed NI.
  14. A very good idea is to become a limited company and not take any pay or dividends. Take everything in director's loans, this avoiding all tax. Pay yourself your £5000 odd so you're not taking the P totally. This is the way to go in an adverse climate.
  15. So should I give in and go to the umbrella company? My agency said I would be classed as an employee of key portfolio so therefore they would pay employers contributions protecting me in future - maternity allowance, JSA for example.
  16. jubilee

    jubilee Star commenter

    You misunderstand self-employment. It doesn't mean calling the shots and doing just what you want. You do what your client wants for the fee that you charge. In this case, the client is the school.
    Teachers who follow this self-employment route at the behest of agencies, need the agency to make work referrals. The agency is, in effect, the client who outsources wprk to you, so the fee comes via their admin and not directly from the school to you.
    I assume that the payroll fee that is charged by the umbrella company includes public liability cover but I don't know .. an interesting question and one that should be investigated. perhaps a teaching Union could advise?
  17. A while ago, when supply was drying up, I investigated 2 options. The first being pimping myself out as a self-employed individual (at a cheaper rate than the agencies). I spoke to several cover ladies who were totally indifferent with a "I just have to get the job done and the black chequebook is there" attitude. The second option was the full costing out of an agency and paying staff a flat rate of £120 a day. (around here, the flat rate was at best £95 a day - who else you gonna work for?) I did the calculation on making £10 profit (net) on every punt. It was exceedingly good and I took the idea to a recently ex-LEA chief. The feedback was that the LEA were so shocking at their job, the schools were "dealing with it themselves, taking things in-house". aka CS's. It was totally and utterly pointless. Certainly, in Cornwall the attitude was at best phlegmatic and at worse lazy and incompetent. Bloody wasters *** up kids' futures. GRRRR
  18. I have emailed my agency regarding public liability this evening and will report their answer if they choose to respond. I may contact my union too, only just joined as I got some work eventually and long term.
  19. Anonymous

    Anonymous New commenter

    From everything I've read online - I cannot see how a supply teacher can be self employed. Have you asked HMRC about this? I appreciate you do a job for a school and invoice them. But how do you fulfill the criteria for self employment?

  20. This is where I too am struggling. Maybe I should telephone HMRC as well this week.

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