I have been approached to act for a hair salon who has 5 workers none of whom are currently on the payroll.
One is admin and the others are senior stylists (so work independently with no supervision) and are paid a day rate. They are under no obligation to work, give notice and fully control their own day and bookings albeit through the salon admin. There are currently no written contracts. They usually each work 2 days per week but are free to do more/less. The salon owner cannot and does not question them if they want time off or to leave early etc. and they are free to work elsewhere. Each worker has repeat clients but my guess is that they perceive that they are clients of the salon rather than the individual (although they would probably follow the individual if they left). If a worker does not turn up clients may use another worker in the salon who is paid by the salon rather than the missing worker.
I have had initial discussions with the client regarding this and that my engagement would not include reviewing the workforce for employment status.
I have pointed the client to HMRC ‘Check employment status for tax’ and he says they have come back as ‘self-employed’ other than the admin who will go through the payroll going forward which will be run by a third party.
The client has been emailed details of a recent tribunal case
https://assets.publishing.service.gov.uk/media/5f2194eed3bf7f1b13f64f69/...
I have told the client that I cannot give legal opinion as to the status of his workers and that he should consult a solicitor if required.
I have suggested that HMRC’s starting point would be that they are employees and it would be up to him to defend his position.
My question is, ignoring the potential hassle that comes with this, does the fact that I cannot/am unwilling to advise on the employment status prevent me from acting as bookkeeper, VAT, accounts and tax work for the salon owner on the basis that the client is responsible for employment status checks (my engagement letter will specifically refer to the client being responsible for determining the status of workers)?
My thoughts are that, if I have pointed out the risks, this should not prevent me from acting (should I choose to).
Replies (21)
Please login or register to join the discussion.
You gave the warnings
Only client and staff know the true facts
But version you write would be a real problem business to operate
I have one client that claims her shop staff are self employed. She will cease trading on 24th, so not a continuing problem
Others I have taken over from did not (according to client)
'Unable to make a determination'.
My question really is whether or not I even need to look at this if it is not part of my engagement i.e. engagement letter specifically says ' you are responsible for determining the employment status of all workers'.
Probably it isn't within your remit.
But that doesn't stop you offering advice to your client.
If you've got a different answer to the client, you've given different responses to him and it might be worthwhile seeing where you differ.
Absolute minimum is for the client to get some written contracts.
Think of all the help you could give the stylists with their SEISS claims and SE tax returns!
A lot of salons hire out seats, which completes the self employed situation. Perhaps the OP's client should do this
The National Hairdressers Federation do a good "rent a chair" template. If your prospective client is a member they could download this and get their s/e stylists to agree to it.
But that is not current position
they apparently work for a daily rate and business makes the sale
business owner apparently does not know if they will turn up at all or for how long
Not to mention of course the tips problem
My opinion is that they are staff merely choosing what hours they work and have no business risk
That is not enough to make them self employed
Zero hours contracts are still employment
MOO not a deciding factor
Zero hours contracts don't typically offer the flexibility to simply refuse the work, which the OP indicates the workers in this case can.
I'm on the side of rent a chair and S/E here.
I don't think there is sufficient info here to make any real judgement on the status position. The case mentioned shows the extent of info needed to be more certain. You do say however that the admin worker is to be accepted as an employee "going forward", perhaps suggesting nothing to be done for the past. If so what then of the potential liability to ( at least) any NIC Ers for earlier periods for this worker? If there should have been some liability, do you (as the agent dealing with the accounts and SA Return) have any MLR matters to consider?
Just a thought!
From memory I think that the Hair Dressers Federation have a
HMRC approved scheme with regard to self employed stylists - might be worth your client giving them a ring if they are a member?