Subcontractor or employee?

[Southern75]

My son started a job Monday valeting cleaning cars etc. Today I was looking at his contract which states he is a subcontractor. After searching the internet I’m concerned that he is actually an employee. He does not state his hours the contract says 9-5 he uses their equipment and wears a uniform they are supplying. Also If he can not go into work for whatever reason he will be charged 25.00 for admin cost to find another contractor there is no hourly rate set out but he’s to invoice them every month in order to be paid not sure how he does that when no agreement of hourly rate has been discussed I’m presuming minimum wage they are also taking a percentage off him for using the valeting equipment so confused about his status any advice appreciated 

 

[Ethel Street]

See what the HMRC employment status checker says

 

https://www.gov.uk/guidance/check-employment-status-for-tax

 

What the contract says he is has little relevance. It's what the substance of the job is that HMRC and courts use use to decide if someone is genuinely self employed.

 

Car valeting has a poor reputation for dodgy practice in determining whether they are self employed to avoid paying the minimum wage, paid holidays etc. It's also not well paid, will he earn enough to go over the tax threshold? 

 

Sadly in practice there may be little he can do about it. Complaining about it will probably just get him fired with little or no redress. If they are paying less than minimum wage he could try reporting them to HMRC . Anyone can reprot it, so you could do it, and it can be anonymously.

 

https://www.acas.org.uk/national-minimum-wage-entitlement/if-an-employer-does-not-pay-minimum-wage

Edited January 29, 2020 by Ethel Street

[Southern75]

Thank you. Useful link it did say employed for tax purposes I have no idea how much he’s paid yet as just started but he’s required to do a week in hand another red flag there. My son needs this job and it’s perfect for him. He s under assessment for autism don’t think he could deal with having to do his own paperwork

[Man in the middle]

Personally I would give the job a wide berth simply because of this:

 

1 hour ago, Southern75 said:

Also If he can not go into work for whatever reason he will be charged 25.00 for admin cost to find another contractor

 

So what if he unexpectedly needs to take a week off? £175 charged? Or is it just for the first day? In any event, this should ring alarm bells and how ever much he needs the job this one seems fraught with potential problems. He clearly is an employee from your description and the employer is simply trying to use the self-employment ruse as an escape clause so as to avoid providing the things that employers have to (e.g. a pension facility, employers' NI contributions, statutory sick pay, statutory leave, etc.). It is also a convenient way to avoid paying the Minimum Wage. The "invoicing for work" scheme will also mean he is liable to pay any tax or NI liabilities that may arise from his employment. He will have to register with HMRC as a self-employed contractor and will be required to file a tax return.

 

He should not even consider taking this job and what's more I would report the matter to your local DWP. or HMRC

[Southern75]

Thank you I knew it was dodgy when I read the contract.

I may just ring hmrc and enquire about registering self employed and explain the situation He d be better off not working they take  15% for using the equipment I think I may invoice at 20.00 per hour as nothing is written to say otherwise. Ha. Seriously thank you for your guidance really appreciated 

Edited January 29, 2020 by Southern75
Extra word

[Man in the middle]

2 hours ago, Southern75 said:

they take  15% for using the equipment

 

It gets worse !!!!

 

So they take 15% of his earnings for using their bucket and sponge!!!???

 

I really don't know how these people get away with such practices. The most notable outfit to try to get away with this was "Pimlico Plumbers" and their boss, Charlie Mullins. Mr Mullins took the matter all the way to the Supreme Court (and lost). This makes interesting reading:

 

https://www.employmentlawwatch.com/2018/06/articles/employment-uk/supreme-court-decision-announced-in-pimlico-plumbers-case/

Edited January 29, 2020 by Man in the middle

[Southern75]

Oh the whole contract has me shaking my head 

this bit made me giggle 

no smoking is allowed in any customer or company vehicles you will be charged 60.00 for cleaning he gets paid 6.00 per car he valets. Madness 

 

 

[Man in the middle]

Please tell me you are going to do all you can to dissuade your son from getting involved with these crooks. I suppose they thrive because many people simply don't read what they're signing up to. They only realise when they have worked for a fortnight and end up owing money.

Edited January 29, 2020 by Man in the middle

[Southern75]

He most certainly won’t be going back  And Hrmc are going to be made aware. 

 

Thanks for all all your help 

[Southern75]

Sorry for late update. Today was his last day not recieved payment he s done 2 weeks apparently he had to work a week s notice I’m so lost now. He asked why he hadn’t received his payment even if just a week as week in hand. They said he missed the payroll if payroll in place surely that makes him an employee and has rights ? I haven’t yet informed hmrc or dwp he wanted what was owed and to walk away

he was made to sign the contract before they would accept his bank details.  The contract states about uniform that he’s recieved but hasn’t and if not returned he ll be charged what do i next ? No longer care about what’s owed. I don’t him operating anymore he’s a bully and gets rich exploiting people