Moneybox
November 1998
My new employer wants me to take care of my own tax. Can I be self-employed?
The short answer is no! With the exception of maternity nurses and some nannies who choose to do a lot of temporary work in short placements, nannies are considered to be employees and do not meet the Inland Revenue criteria for self-employment.
Not meeting the criteria for self-employment includes some or all of the following:
- That you work on your employers’ premises (rather than your own)
- That you work regular hours and at a wage set by your employer (not your own chosen hours and rate)
- That your work can only be carried out by you
- That your income comes from just one source – or two if you have two part-time jobs (as against from a number of different sources)
All of these factors fit the profile of an employee and not a freelance provider of a service (which is what would entitle you to be self-employed).
Of course a few fortunate nannies may have been given self-employed status by their tax offices by mistake – fortunate because they can deduct several types of expense against their tax liability unlike an employee on PAYE – but they are definitely the exception rather than the rule. Self-employed people generally pay less tax so the Inland Revenue is keen to deny self-employed status to those who do not truly qualify for it!
It is your employers’ responsibility to sort out (and pay) your tax and NI and if they fail to do so it is they (and not you) who the Inland Revenue will chase for any outstanding tax and NI liability. This could also result in their facing fines and penalties.
Agreeing to be ‘self-employed’ with no intention on your part to declare or pay any tax or NI is even less advisable. Your right to such state benefits as unemployment benefit and the old-age pension depend upon your making regular NI contributions throughout your working life. These may seem unimportant now but you'll certainly value them as you get older.
So don't help your employers to avoid their responsibilities – to you and the tax system – by agreeing to a self-employed status to which you are not properly entitled. And if your employers refuse to operate PAYE on your behalf you should consider finding new employers who will.