Pension Auto-Enrolment

[Essex1]

Had a few of my guys in to see our pension guy this week. I have one SE guy and because we have a contract of employment he also falls under our scheme. This is the first I knew about SE tradesmen having possible pension deductions so I thought I would share what I learned.

 

[Murdoch]

I find that difficult to believe. Either he is SE or employed? I would seek a 2nd opinion

 

[Evans Electric]

If he's SE  is he not resposible for his own pension ?

I'm SE  will you contribute to my pension ?

 

[Murdoch]

Had a few of my guys in to see our pension guy this week. I have one SE guy and because we have a contract of employment he also falls under our scheme. This is the first I knew about SE tradesmen having possible pension deductions so I thought I would share what I learned.

This is worth a read :

http://www.thepensionsregulator.gov.uk/docs/detailed-guidance-1.pdf

 

[Essex1]

It sounds like he is correct the. It all depends on whether a contract is in place.

 

[Murdoch]

It sounds like he is correct the. It all depends on whether a contract is in place.

So if he's employed he can't be SE surely?

 

[ProDave]

So if he's employed he can't be SE surely?

you can be both.

But if you have a contract then work for that company is classed as employed work and tax and NI should be deducted.  Any work you do for other clients is still self employed and declared on your tax return as such.

It can get complicated as often if your tax due is a small amount, instead of just paying it, they fiddle with your PAYE tax code to collect more from your employed earnings.

 

[Murdoch]

you can be both.

But if you have a contract then work for that company is classed as employed work and tax and NI should be deducted.  Any work you do for other clients is still self employed and declared on your tax return as such.

It can get complicated as often if your tax due is a small amount, instead of just paying it, they fiddle with your PAYE tax code to collect more from your employed earnings.

you can be both.

But if you have a contract then work for that company is classed as employed work and tax and NI should be deducted.  Any work you do for other clients is still self employed and declared on your tax return as such.

It can get complicated as often if your tax due is a small amount, instead of just paying it, they fiddle with your PAYE tax code to collect more from your employed earnings.

Yup - but the OP is suggesting that he has employed a person who is SE - so surely that makes him a contractor.

Glad I enjoy being SE on my own - all this stuff would drive me mad!

 

[Essex1]

you can be both.

But if you have a contract then work for that company is classed as employed work and tax and NI should be deducted.  Any work you do for other clients is still self employed and declared on your tax return as such.

It can get complicated as often if your tax due is a small amount, instead of just paying it, they fiddle with your PAYE tax code to collect more from your employed earnings.

This is how I understand it. SE status is massively abused by companies using it as away to get around holiday pay and the like. Some working for years for the same company but getting nothing back. I should add that this guy being SE is his choice. Not ours.

 

[ProDave]

I think the question is, does he also doe true self employed work for other people?

If so then he can claim he's SE.  If eh only eved does work for one person, then he's an employee.

This was clarified a few years ago, and stopped sole traders partners being a self employed accountant, doing just the accounts for their partner.

 

[Lurch]

Had a few of my guys in to see our pension guy this week. I have one SE guy and because we have a contract of employment he also falls under our scheme.

Does this guy send you an invoice each month or is he actually employed by you? Doesn't matter what he does for other people, this is completely irrelevant.

 

[Essex1]

No he does a timesheet as everyone else does. What it boils down to is thinks he is better off witht the extra he gets paid by the hour.

 

[Lurch]

No he does a timesheet as everyone else does. What it boils down to is thinks he is better off witht the extra he gets paid by the hour.

So he is actually on the books as a signed up employee, PAYE and all that? Not really a surprise that he's eligible for the pension payments then.

 

[Essex1]

No he is not PAYE. He is SE as I stated.

No he is not PAYE. He is SE as I stated.

 

[M107]

you can be both.

But if you have a contract then work for that company is classed as employed work and tax and NI should be deducted.  Any work you do for other clients is still self employed and declared on your tax return as such.

It can get complicated as often if your tax due is a small amount, instead of just paying it, they fiddle with your PAYE tax code to collect more from your employed earnings.

that is exactly what I do.

 

[Lurch]

No he is not PAYE. He is SE as I stated.

So he sends you an invoice each month then?

 

[Essex1]

No. He does a timesheet as a said.

 

[Lurch]

No. He does a timesheet as a said.

That doesn't really mean anything, I have subbed to other companies before and sent a timesheet in the same as the employed people, but mine went in with an invoice whilst being completely SE.

He has to be one or the other, he can't not be employed, and also not be SE. Either there is an invoice involved or he is employed, or he is defrauding the HMRC.

 

[Andy™]

No. He does a timesheet as a said.

so he's PAYE then?

to be SE he needs to send you an invoice for payment. if you are just paying him from a timesheet without an invoice then thats more like PAYE. next week he will be claiming back dated holiday pay too...

 

[Essex1]

No he is not PAYE. The state of his employment does not depend on whether their is an invoice number at the top of a piece of paper or not.

I take the point about back dated holiday pay however and I may have to address that.