Self-Employed Individual

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Introduction

These are individual workers we may wish to engage to help us with over-spill work, or because they possess a valued skill we need to help us complete a project.

Minimum Insurance Cover

These workers must carry a minimum of £5m Public Liability insurance cover, supported by a Indemnity to Principal clause in their policy terms.

Some of our clients, such as local government authorities and councils, require all of the contractors to carry at least £10m Public Liability cover. If we engage a contractor to work on their sites we must make sure all our contractors carry this minimum level of cover.

Please Note: It has been known for some clients who normally require a minimum £10m cover to accept contractors who only carry £5m or less for particular low-risk projects. It is a legal imperative that should a client suggest this compromise, the permission to waive the £10m minimum cover must be obtained in writing and sourced from a person of sufficient standing within the organisation where it can be reasonably presumed they have the authority to make such a decision. The time to discover they didn't have the authority is not when you face a large compensation claim against you that may quickly turn into an uninsured one.

They may also need to carry ££1m PPI cover if their work involves any decisions that involve a design element (for example, installing fire detection, alarms, or emergency lighting where they are making decisions as to how many and where such equipment is to be installed).

A written and signed Contract for Service

These contractors must sign a written contract for service agreement to satisfy the requirements of the HMRC if they are with to be processed and paid through our CIS scheme.

The contract must stat that they cannot take on additional workers to help them complete their work, and they have no rights of substitution.

Employment Status Conflicts

One of the problems that can arise with engaging this kind of contractor, is that if they are highly skilled, efficient, and can be relied upon to get the job done with the minimum of supervision, it is only natural that we might wish to engage the person more often. If the frequency of engagement is too high, it can compromise the self-employed status of the individual.

There is no statutory guidance on when the frequency of engagement triggers a change in employment status from self-employed to employed. Case law frequently refers for the need to consider all of the hallmarks of employment status and holistically arrive at the correct conclusion as to whether an individual retains their self-employed status or is employed in all but name. The process is open to a wide degree of interpretation even amongst experts on employment status law. The misguided attempts of lay people to cherry pick arguments that serve the outcome they seek only makes a contentious issue all the more difficult to resolve.

The final decision over employment status and similar tax compliance matters must rest with the Company's accountant who owns the ultimate responsibility at a professional and ethical level to get the decision right. Unless their considered view prevails, the only sensible way to resolve the matter is to officially refer the case to the HMRC for a final decision.

Personal Service Companies

A contractor providing their labour through their personal service company is specifically prohibited from being treated as self-employed and being paid through the CIS system.

Marisco Group

Head Office:
Unit J5, The Fulcrum
Vantage Way, Poole, BH12 4NU

Tel: 01202 474001

Email: accounts@mariscosouth.com

Marisco South Ltd is registered with: