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Is this okay- started a new job and found out I am 'self employed'

Discussion in 'Teaching abroad' started by cooplacherry, Aug 31, 2015.

  1. cooplacherry

    cooplacherry New commenter

    Is this okay, or should I be worried please?

    I have just started a new job- everything looks good, it is a COBIS school. When I arrived I was taken to the finance person and basically have just become self -employed. Everything is in the local language but I was talked through it. It seems that I am running my own business and renting a room from the school.

    I asked the Head who said it is all above board and okay. There are some expat teachers who have been in the school for quite a long time, and nobody seems freaked by this. In fact a senior teacher has just come back to the school so everybody seems to be happy with the situation.

    I have tried to ask more about it, and then the school are going to open a bank account for me and I have been told that I have to sign a document giving the finance person power of attorney over my bank account.

    Help please!
  2. Kartoshka

    Kartoshka Established commenter

    Hard to say without knowing the country. In some countries, "bending the rules" like this is almost a part of everyday life. In other countries it would be strongly frowned on.
  3. TonyGT

    TonyGT Established commenter

    As above. In any Western country this would probably make the newspapers. In the more 'deserty' countries it's probably totally fine.
  4. ElH


    I had a job just like that. Self employed, all sorted by the school. When I saw my tax return (that the school had kindly done for me) I discovered that I was declaring twice what I was getting paid, and I was "donating" the balance to the school. At first I wasn't bothered, because I was not expecting that income, but it also entitled me to pay a proportion of the school's tax... It is worth having your accounts checked by a local accountant who is not employed by your school, if you are not sure.
  5. davidbowiefan

    davidbowiefan Established commenter

    Was your visa application done on the basis that you would be self-employed?
  6. lunarita

    lunarita Lead commenter

    You need to ask some questions such as:

    Are you liable for your own tax and/or national insurance contributions or whatever the local equivalent is. In Spain the self employed have to pay a hefty whack for this regardless of earnings. I think teachers in many language schools are self-employed but I haven't heard of it (yet) in the british/international schools.

    Maybe making you self-employed is the employer's way of saving money on such things. You need to check.

    Edited to add - just noticed the bit about giving someone at the school PoA over your bank account?! I can't imagine anything that could persuade me that was ok. Ever, anywhere.
  7. cooplacherry

    cooplacherry New commenter

    Thank you for your replies everyone.

    I am in the EU so do not need a visa. My original job offer, by email, did not mention that I would be self employed.

    As far as I understand it, the school makes all of the payments for local taxes on my behalf and my salary is then paid directly into the account the school opened for me. I have been told that I cannot have my salary paid in to any other account. I asked about the power of attorney and was told that nobody else has ever complained and it is the way everything is done.

    Of course I cannot identify the school or its accrediting organisation, but it is an official British school with the right to run QTS for newly qualified British teachers.
  8. lunarita

    lunarita Lead commenter

    I really don't understand the PoA bit. Are you sure this is what they have? Or did they just open the account on your behalf?

    I think I'd open another account myself and transfer the salary there immediately, every month. I'd hate ANYONE else to have access to my bank details.

    Can you identify the country?
  9. WaylonWu

    WaylonWu Established commenter

    Personally I've never heard of this. It sounds very unusual.

    The POA sounds even worse. There is no way I would agree to that. Do you know if others have? But regardless of that, I wouldn't agree to it.
  10. WaylonWu

    WaylonWu Established commenter

    What about your contract? Do you even have one? If not, and it doesn't say in the email, I wouldn't accept the self employed status. If you don't have a contract that in itself is weird.

    Did you sign for this bank account? Do you have any details of it? Have you even seen it?

    That answer sounds quite strange. Ask yourself these questions and ask the other teachers about their situation. You seem to have been given almost zero information on all these issues and then fobbed off with no one else has questioned the POA before. None of this sounds right to me. You need to ask questions a lot more.
  11. davidbowiefan

    davidbowiefan Established commenter

    This is a way for them to avoid paying national insurance, pension contributions, health insurance and so on. This is to the employer's advantage but there's nothing in it for you.

    If you are only working for the one employer and you are working for them full-time you aren't self-employed and it isn't in the least above board. In the UK if you're self-employed you're responsible for paying your own tax and any arrangement where the employer does it for you isn't self-employment.

    Self-employed people declare their own earnings to the tax authorities at the end of their financial year. You don't pay monthly. Which raises the question of what these deductions are and who they are being paid to. If you're self-employed you should be receiving a gross payment without any deductions taken out of it.

    It sounds as if you are being shafted and they are breaking the law.
  12. WaylonWu

    WaylonWu Established commenter

    This is what I was thinking too.

    Even supposing the rules in the OPs country are different, she/he could still be liable for UK tax when they return.

    I agree, Hence my questions and comments above.

    I'm afraid OP, davidbowiefan is almost certainly right.
  13. WaylonWu

    WaylonWu Established commenter

    As an afterthought, there is also the possibility you could be fined by HMRC on top of the tax you may be liable to pay in the event they have to look into your tax liability in UK.
  14. cooplacherry

    cooplacherry New commenter

    That's what I think. And in response to another person here, yes, it is definitely Power of Attorney, and the finance person said that when people leave the school closes the accounts and the 'company' that the teacher has set up in order to work at the school.

    However, what to do? If I leave it will mess up my CV. I don't have lots of spare money and need the job.

    Feeling a bit sad, truth be told.

    It is an Eastern European country.
  15. kemevez

    kemevez Occasional commenter

    I suspect one of two things is happening. Either you are being shafted or the school does things this way because its the easiest way for them to give you the best deal. Without a bigger hint about the school its hard to give an opinion though. So without breaching the community guidelines,could you be a little less direct and give us a clue.....
  16. cooplacherry

    cooplacherry New commenter

    I have been rereading an old favourite and this quote struck a chord: “I sometimes think we must be all mad and that we shall wake to sanity in strait-waistcoats.”
  17. davidbowiefan

    davidbowiefan Established commenter

    If you're in Dracula territory you've got more to be worried about than dodgy tax arrangements!

    A contract would be proof that you aren't actually self-employed.
  18. davidbowiefan

    davidbowiefan Established commenter

    Go with your gut feeling. If this is how things start out they might get a lot worse as time goes on.

    Wouldn't it be better to be a legal shelf-stacker in Tesco than an illegal teacher abroad? If the authorities discover what's going on and decide to prosecute it doesn't bear thinking about.

    Ask them right now how its possible to be self-employed when they are deducting tax. How will you get proof that the money is going to the tax authorities? Will you get a payslip? If so, this is further proof that you aren't self-employed. If you don't have evidence that you've paid tax this carries a further risk of prosecution.

    And there is no way I would allow a school to have authority over my personal bank account!

    I understand your concerns about leaving but this sounds dodgy as hell.

  19. davidbowiefan

    davidbowiefan Established commenter

    HMRC don't impose fines for unpaid tax in another country as they only have juristiction over the UK.

    It would be the unnamed foreign tax authorities who could prosecute the OP.
  20. WaylonWu

    WaylonWu Established commenter

    Fair enough. But the OP could still be liable for UK tax when he/she returns.

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