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My question is about working self-employed in England. The visa type I'm interested in only allows me to become a self-employed individual and requires me to pay tax depending on my income. So, in my case, this means that I can only offer my services to different clients/companies not as a permanent employee but as a freelancer. This is where my worries start. How do I find out what sort of contract I would be offered (before entering England) if I started doing some work in England. OR would companies help me out on this by drawing up a contract special to my circumstances? If not, How am I supposed to prove to the Home Office that my deals with the clients/companies are all legit and in compliance with the restrictions of the visa?

Dirty-flow
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Deniz
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1 Answers1

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According to HMRC's website on employment status:

Employment status isn't a matter of choice for either you or your workers. It's a matter of fact, based on key terms and conditions of your working relationship with them - for a list, see the next section. In most cases these terms and conditions will be reflected in your contract with the worker. But even if a contract says a worker is self-employed, if the facts indicate otherwise then the worker may be your employee.

Specifically:

In most cases, employment status is straightforward. As a general rule, a worker is:

  • employed if they work for you and don't have the risks of running a business
  • self-employed if they're in business on their own account and are responsible for the success or failure of their business

The website lists a number of points to consider when determining the status, and there is also an interactive tool that helps you determine the status online.

Berislav Lopac
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  • Thanks for the effort to look it up. As far as I understand from that site, one can be officially self-employed and still do contractual work legally just like an IT consultant, freelance translator/interpreter or a private tutor. I guess it all depends on the company/client and what sort of a person they want to do business with. @BerislavLopac – Deniz Jun 30 '14 at 22:03
  • As I understand, if your visa allows only self-employed work, then you are not allowed to work as employee or contractor, even if you have your own business. – Berislav Lopac Jul 01 '14 at 17:50
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    Also note that a contractor is not considered self-employed -- it is basically just a short-term employment. – Berislav Lopac Jul 01 '14 at 17:51
  • Thanks for the input! However, I got really puzzled after reading your last comment. If doing freelance work on a contract (contractual work) is not considered self-employed, how can a person possibly be a private tutor or an interpreter for a company? There has to be some sort of paper stating your tie with the place you are working for. Call it a contractor or a freelancer, that self-employed individual will be given an official agreement/contract for the services s/he offers. Am I wrong here? @berislavLopac – Deniz Jul 01 '14 at 22:30
  • There is a fine line here, but in most cases I would say that it is easy to discern. As the linked site states, people are considered "self-employed if they're in business on their own account and are responsible for the success or failure of their business". For example, if you do the work from home (as opposed to your client's office), using your own equipment and if you can give the work to someone else but remain responsible for its execution, you would be considered self-employed as a typical freelancer. – Berislav Lopac Jul 02 '14 at 08:46
  • Essentially, any business relationship is based on some kind of a contract, so this is not the discerning factor. Generally, there are three main types of working relationships: freelance, where you work on your own, usually for several clients; full employment, where you work as part of the company; and contracting, which is basically the same as employment only with short contract times (generally less than a year). With employment, the remuneration is usually agreed on an annual basis, while with contracting it's daily. In terms of taxation, only freelancing is considered self-employment. – Berislav Lopac Jul 02 '14 at 08:51
  • Of course, IANAL, so make sure to confirm with authoritative sources before acting based on above information. – Berislav Lopac Jul 02 '14 at 08:52
  • Within employment law "contracting" doesn't unambiguously mean "short-term employment" in fact it usually means the opposite I'm afraid. There's no real legal distinction between short and longer term employment as a matter of status which is what matters for tax and immigration. You acquire more rights after various periods of time (like 2 years) but it is misleading to think of "contracting" (in your sense) as a separate category. The important question from a tax/immigration point of view is "is this person employed" or not? – Francis Davey Jan 06 '15 at 14:03