Self employed status raised in court today .

[Evans Electric]

Any views on the Pimlico Plumbers case in court today? 

 It sounded like the typical ...in my experience... self employed tradesman who subs to a bigger firm .   

In this case he drives their van , wears their uniform & acts on their behalf  but , as we all know, doesn't receive sick pay , holiday pay , pension scheme etc .

The court has ruled ..I think.... that he should receive these things.

In our previous entity we had , at one stage ,   1 spark , 2 apprenttii on the books  , 5  virtually permanent self employed subbies  and others as required .  

We worked on the assumption that if the subby quoted for the labour only part of a contract , he satisfied the criteria for SE  . 

We were once challenged on this , before doing it in that manner, as was another local firm , so we swapped subbies for a month to prove that they were not permanently employed .     I remember HMRC challenging building contractors , ordering them to employ everyone  directly , obviously with no understanding of the building trade .

But it did prompt them to invoke  , first the 714 / 715 system   then something else , then the present CIS system  and next .... the pay up four times a year system  .

If you ever wondered if the country was short of money ....the latest system is the proof .  They just love the directly employed worker who has his tax & NI raked off before he sees his wages. 

 

[ProDave]

I always thought the "test" of whether you are self employed was how many people do you do work for.  If it is just 1, you are NOT self employed.

I had a letter a while back, I can't remember if it was from self assesment, or tax credits, but it was certainly one of them. It set out what constitutes being "self employed" and among the things it mentioned were working for more than one person or company, submitting invoices for work done and a load of other stuff as well.

So I would say these guys were very clearly not self employed, rather probably emplyed on a zero hour contract?
 

 

[Doc Hudson]

I understood it was also the case that they were not allowed to do any work of their own for anyone else during the 5 days a week,  that they were contracted to be available to Pimlico. It is at the end of the day just another way for an employer to cut their costs and liabilities to their "employees".

Doc H.

 

[Evans Electric]

I seem to remember , when I became SE  ,  just after the Stonehenge job ...or was it that Pyramid contract ...anyway  I remember the criteria  of "Taking a financial risk"  being bandied about .    If you are just turning up for hourly wages you are not SE  , but a financial risk  as in supplying materials , submitting a quote / estimate then an invoice and being responsible for your own tax then you were SE .

 

[Lurch]

Just another way of closing one loophole and leaving another one open. There's ways round every version, although the Pimlico model is definitely not subcontract. I do a lot of subcontract, and I can go where I want, within reason. If I was subbing to someone for the week I would aim to be there all day every day, unless something major needed urgent attention then I'd nip off for an hour, or the afternoon if I could. If I wasn't allowed to leave until 1700 then I am not a subcontractor. Same rules as working for any other customer really, doesn't matter if it is a rewire down the road or a job fro another firm.

There's a lot grey areas though, and always will be until all the loopholes are closed, by which time the whole thing will be a mess and unworkable which will mean there will be no point in doing subcontract which the government will call a win even though it will have seriously messed up industry/trade.

first the 714 / 715 system   then something else , then the present CIS system

Pretty sure I remember it going straight from the 715 to the CIS scheme.

 

[Evans Electric]

Just another way of closing one loophole and leaving another one open. There's ways round every version, although the Pimlico model is definitely not subcontract. I do a lot of subcontract, and I can go where I want, within reason. If I was subbing to someone for the week I would aim to be there all day every day, unless something major needed urgent attention then I'd nip off for an hour, or the afternoon if I could. If I wasn't allowed to leave until 1700 then I am not a subcontractor. Same rules as working for any other customer really, doesn't matter if it is a rewire down the road or a job fro another firm.

There's a lot grey areas though, and always will be until all the loopholes are closed, by which time the whole thing will be a mess and unworkable which will mean there will be no point in doing subcontract which the government will call a win even though it will have seriously messed up industry/trade.

Pretty sure I remember it going straight from the 715 to the CIS scheme.

Yes I think you're right Lurch , I just seemed to have a recollection of something else for a short period.

 

[Lurch]

Yes I think you're right Lurch , I just seemed to have a recollection of something else for a short period.

If you just highlight the text in the post there should be a little "Quote This" that pops up, saves you quoting the entire thing and then highlighting bits of it.

 

[Evans Electric]

"Quote This" t

Hey  !! You're right ....as I keep saying , learn something every day . :Salute

 

[steptoe]

There was the old SC60 scheme that ran alongside the 714/715 that was very much like the CIS of today, whereby you lost 20% (or was it 25%?) of your money at source, that's what I worked under.

The 715 was more like the gross payment system we have now.

I had the subby thing with a builder I worked for almost exclusively, their accountant came to the conclusion that as everything I done was on a price then I was a sub-contractor as I took a financial risk, the only thing we had to change was that instead of simply sending in invoices, I had to start sending in quotes dated about 2 weeks before the job commenced,

 

[Evans Electric]

Thats right Stepps , thats what we did  ...accepted a quotation to carry out certain works  followed by an invoice when finished. And the 714 proved to us that they were responsible for their own tax. 

AH !!!  Yes  That was it !!    The C60  system !    All the blokes subbing to builders seemed to use that system but we never did .

See Lurchio  I knew I wasn't going loopy  , well not quite anyway. 

 

[steptoe]

The other funny thing that I had to do on the odd occasion was supply materials and charge for them too,

So I bought the materials from the builder, he provided me with an invoice, then I billed them back to him +20% (which obviously then got lost from the labour bill)

 

[Sidewinder]

TBH, I think that if what I read in this thread is correct then the Pimlico model is employment on zero hours contracts.

Unless you are providing labour and materials, can send someone else to do the work if you don't fancy doing it, work for more than one client, and are quoting for jobs and thus taking on genuine financial risk, i.e. of the job runs over, tough, or if you have to do warranty etc. at your cost, then you are not self-employed.

I think that there is much to much of this zero hours contracting going on, and the employment agencies are the worst for doing it, they are just lepers feeding off the zero hours contracts of others.

 

[Evans Electric]

Our policy was ,   you are here for the duration of this job , say  6 weeks , and we will be  quoting all the time , ( in the good times) with you in mind to move on to the next one  ad infinitum  ...we didn't want a huge work force   ,   ...they wanted to be SE , all taxes paid  , no one gets hurt .     We lost a school extension job once to a local competitor  , this meant no job for two of our subbies , they went to the competitor and did the school job ,  no hard feelings .  They hung on to the one and the other guy came back to us eventually .

They used to say years ago , if you leave a firm ..don't slam the door because they won't open it for next time .

 

[steptoe]

TBH, I think that if what I read in this thread is correct then the Pimlico model is employment on zero hours contracts.

Unless you are providing labour and materials, can send someone else to do the work if you don't fancy doing it, work for more than one client, and are quoting for jobs and thus taking on genuine financial risk, i.e. of the job runs over, tough, or if you have to do warranty etc. at your cost, then you are not self-employed.

I think that there is much to much of this zero hours contracting going on, and the employment agencies are the worst for doing it, they are just lepers feeding off the zero hours contracts of others.

Our policy was ,   you are here for the duration of this job , say  6 weeks , and we will be  quoting all the time , ( in the good times) with you in mind to move on to the next one  ad infinitum  ...we didn't want a huge work force   ,   ...they wanted to be SE , all taxes paid  , no one gets hurt .     We lost a school extension job once to a local competitor  , this meant no job for two of our subbies , they went to the competitor and did the school job ,  no hard feelings .  They hung on to the one and the other guy came back to us eventually .

They used to say years ago , if you leave a firm ..don't slam the door because they won't open it for next time .

I agree with both the above,

The builder I almost exclusively worked for, I used to be his QS , and left solely to have more control over my work life balance with the kids and wife, when they took me back as subby they were well aware that was the reason I had left, I was given the jobs and a completion date,  already knew most of the other guys on the jobs so worked direct with them when I would be there or not. 

When I left them I actually stayed 4 weeks longer than I should have to give them time to get another QS, 

As Mr Evans says

Don't burn your bridges, you might need them some day to stop yourself from drowning. 

 

[Sharpend]

TBH this is all smoke and mirrors by Hmrc if you ask me, haven't they got bigger fish to fry like those that choose what to pay or even pay? The bloke accepted the T&C's when he signed up, don't cry wolf when it goes tits up in your end otherwise sign a different contract which says you are an employee? 

 

[Doc Hudson]

If anyone hasn't seen or heard the report here's a link http://www.bbc.co.uk/news/business-38931211  From the article it states,  "He was VAT-registered, and paying tax on a self-employed basis, but worked solely for Pimlico Plumbers for six years."  So he only ever worked for Pimlico for 6 years, had to hire their branded van, couldn't do his own work during the week, but he was self employed? It appears there is also a subtle difference between being a "worker" and an "employee". This has had to go to an employment tribunal and the court of appeal to decide, whatever has happened to common sense?  Actually it may sound a bit more like a franchise arrangement, where you have to meet certain criteria to maintain the brand etc. rather than a full self employed status..  

Doc H.  

 

[Sidewinder]

Now franchising is a different kettle of fish, because with a franchise, you can shut the doors.

For example, if you are running a franchised premises.

You get up in the morning, and decide that you don't want to do this anymore.

You can simply not open up, it's your premises to pay the rent on, your stock, your employees to pay, so you have a financial risk.

This guy it seems was in a different scenario.

With a franchise you can decide if you want to grow the franchise, you can, you can take on another van, and put someone else in it, you then take on the liability , thus financial rsk for their work, you can then let them do all the franchise work, and you can go and do what you like.

I don't think the Pimlico guys could do that?

 

[Doc Hudson]

Now franchising is a different kettle of fish, because with a franchise, you can shut the doors.

For example, if you are running a franchised premises.

You get up in the morning, and decide that you don't want to do this anymore.

You can simply not open up, it's your premises to pay the rent on, your stock, your employees to pay, so you have a financial risk.

This guy it seems was in a different scenario.

With a franchise you can decide if you want to grow the franchise, you can, you can take on another van, and put someone else in it, you then take on the liability , thus financial rsk for their work, you can then let them do all the franchise work, and you can go and do what you like.

I don't think the Pimlico guys could do that?

Yes, I think you are right.

Doc H.

 

[Evans Electric]

I wonder if the "worker"  wants his cake & to eat it ?  It suited him to be SE  ,  then unfortunately he develops a health problem , but as most of us all know , no one will be giving us sick pay  or unemployment benefit or holiday pay , its one of those things . 

An employee who developed a health problem  would, perhaps, be moved to lighter duties but thats not going to happen for an subby.    

It can work for both parties .  A sparky with his own alarm business used to sub to us , we had an understanding that if he had an urgent call out  he would phone in to tell us, then go sort it .    No different really to being moved around by your own office.   

His work was getting a bit short ,  but if he had an install coming up he would tell us , not in next Mon / Tues say .   

He was one of the good guys , liked him a lot ,   he went to help out another alarm company..... I won't name him because he was killed there , fell down a lift shaft  .  Left his wife & two lads aged about 10 I think .

 

[Lurch]

I wonder if the "worker"  wants his cake & to eat it ?  It suited him to be SE

Seems to be the case, obviously had no issue with the arrangement in the 6 years previous.