Self employed?

Self employed?

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My nephew is working as an employee in Denmark for a Danish company. He wishes to leave and move to London. They have offered for him to continue to do work for them on a freelance basis. This is all internet baed and he assumes it is best to be UK self employeed as the company has no entity in the UK and could not register in the UK as an employer and indeed would not wish to do so. He assumes that he will invoice them each month and account in the UK for tax, NI etc. As they will be the only source of business though not defining hours, place of work and he is free to do other work etc. he must be self employeed? I assume.

Comments appreciated.

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By mhtax
01st Sep 2013 14:33

Employee I am afraid

Where an employee works solely in the UK for an overseas employer there is no change in employment status. As long as the company has no establishment in the UK  it cannot register as employer (if there is an office they are obliged to operate a PAYE scheme). The employee therefore opens and runs his own PAYE scheme on behalf of the company. In view of the current RTI position I recommend you ask the Employers helpline if RTI applies in these circumstances. I also always recommend he seek professional support for the operation of the payroll

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By Steve Kesby
01st Sep 2013 15:05

How?

How can a person A be the employee of a person B, when B does not control the how, when and where, nor the when of what, A carries out the tasks that need to be performed?

With such a complete absence of control, A would also seem free to delegate. Is there a requirement for personal service?

Who is providing the computer on which A will (presumably) carry out the work?

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By mhtax
01st Sep 2013 16:37

PAYE regs

deem that the employee is acting as the agent of the overseas employer and liable to run PAYE on his employment. If there is no difference in his duties before and after the move then this will apply. If he accepts an appointment after the move and the different conditions of service fit the criteria for self-employment then he would be able to register in the usual way. The usual complication arises if they wish to maintain their equivalent NIC position in the country of origin. If still employed they can continue to contribute to their home country system for 5 years but I am not sure if that is the case when self employed

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