A former employee of a restaurant left last December to set up his own business.
However, he has recently agreed to return during his quite spells to put in some ad-hoc hours to help out as a waiter. He has agreed with the owner to invoice for these hours monthly via his company - all other waiting staff are employees (some seasonal, some permanent).
My initial response is that he should be paid as an employee. Is there any case for this self-emplyment/limited company invoicing arrangement?
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How big is your client? I doubt that the IR35 rules that (might) impose an obligation to deduct tax and NIC apply to your client and that any such obligation falls on the waiter's company.
Are you saying that you are incapable of using Google to find the definition of small company for the purposes of the post April 2021 IR35 rules?
Never great to start a sentence with 'are you saying' followed by something that was not said.
I'd simply answered your question and presumed that it was understood all round that the company is small.
Thanks for your initial response though.
But seldom with the supply consisting solely of ex-employees (with no alternative personnel as a choice)?
Correct but we don't know if that is the case. The ex-waiter might have set up a restaurant and could spare any number of his staff from time to time..
I was trying to make the more general point that businesses often supply staff to other businesses (temporary, casual, on secondment, etc) but the relationship needs to be properly contracted
He's a one-man band - his limited company trades in a completely different sector. This seems to me just a decision to raise invoices for his hours via his company instead of going on payroll, without the slightest consideration of IR35.
Across the header and the question itself this is described as self-employed v employed and self-employed / limited company
If i'm reading right Former Waiter Limited is proposing to supply the restaurant with staff (the particular person just happens to be a former waiter of the restaurant - but is that relevant?. There isn't a suggestion of self-employment here at all.
If all properly documented i'm finding it hard to see anything wrong with this and, based on the restaurant's size, IR35 responsibility falls to Former Waiter Limited to get right.
Former Waiter is trades in a completely different sector via his limited company. It's a PSC - just him involved. He's providing his casual labour through his company. There's no mutuality of obligation - in fact, there's no contract at all. It's just a verbal offer and acceptance of ad-hoc hours.
Most other indicators point to employment. HMRC's CEST tool produces a 'within the scope of IR35' result.
Recent case law suggests that Mutuality Of Obligation is a necessary (but insufficient) indicator of employment, which suggest that all "zero hour" employees are actually not employees... which cannot be right!
I don't see how zero hours could be mutality of obligations.
If I have no obligation to provide work to my employees, and they have no obligations to carry it out when I do have work for them to do it, how could they have employee status?
Because you've started from your own assumption ... "Recent case law suggests that Mutuality Of Obligation is a necessary (but insufficient) indicator of employment" ... with which I find hard to agree. Could you cite your basis?
For instance, Zero Hours contracts are common in the F.E. sector for lecturers in non-core subjects.
They are definitely employees (delivering teaching in premises of the employer / using employer's equipment / schedule set by employer / substitution not at discretion of lecturer / and so on) ... but employer can cancel the course with little notice if it has become uneconomic for them.
Irrespective of the morality of this approach, I don't see anyone disputing that these lecturers are part-time employees (on zero hours contracts) ... or claiming that MOO is in operation?