Pay rise when self employed.

[Pottyone]

I know there is an obvious answer to this, but how do I go about awarding myself a pay rise when self employed? I have been working for a small firm for a number of years. When I got the job, the boss made it clear he didn't want anyone on his books, so I became self employed. The job should not have been a self employed post, but I needed the work. It has always suited me as I use my 'self employed' status to my advantage, e.g its a part time job and I swap my work days when it suits me. He gave me a rise after a year but I haven't had another in 3 years. In theory I should just up my hourly rate but each time I give him an invoice, he quips 'how much' etc etc. Most of the time he doesn't even look at it and I pay myself anyway. But every so often he comments on how my job may be going soon and I have no contract. Not sure how to play it. I am looking for another job but the flexibility of this can't be matched.

[redcrx]

you are not self employed if he is the only company that you work for and he dictates your hours etc.

if you are truly self employed then you should just notify him of a price increase in your hourly rates and start charging more.

[ummmm]

http://www.theanswerb.../Question1001425.html

[Skyline D]

You are not self employed and if the Revenue actually cotton on to the fact they'll put a stop to it. But then I imagine you know that already from the comments in the post.

Other than that, redcrx has answered it for you. Since you are in theory self employed for the time being anyway you can invoice him what you like (you probably best notify him in advance that rates will go up before hand). Of course the risk you take is that he then says he doesn't need you any more and won't pay it. As a self employed individual you have no employment rights.

Of course in practice you are not self employed and if you were bothered enough to take it to a Court I'd imagine it would rule you did have employment rights and the Revenue would step in and enforce Employer's NIC on your boss going back however long they need to.

Probably better to arrange a compromise because going down a legal route is only going to lead to loss of job one way or another.

[Pottyone]

After taking this job I took on another, very different, small role, which is definitely self employed, so by having 2 jobs I don't think I'm breaking any self employed rules. Plus I had checked and got told that he might be breaking rules but I am not. He doesn't dictate my hours, I do what is needed and that fluctuates week to week, and I also choose which days I do the hours. Its just the pay rise I need advice about.

[McMouse]

If you are 'self employed' you sell your efforts for an agreed price per hour/day/week etc. If the market will stand it raise your rate. But as other posters have said you are not actually self employed. The firm you work for should be paying NI and collecting IT from you.......if HMRC get wind of this, both you and the firm will have penalty payments due.

[MarkRae]

In addition, you need to make absolutely certain that you do not fall under IR35, the "disguised employment" tax: http://en.wikipedia.org/wiki/IR35

[redcrx]

if you really believe yourself to be self employed then YOU set the rates that you are paid not him. He is just a customer, and as such you have to judge what you charge him and he has to decide if he will buy your services or go elsewhere

[boxtops]

In my job, we use the services of a number of people who are self-employed sole contractors (generally independent trainers). We have to pay them through payroll, but our payroll department asks them to demonstrate their self-employed status with the tax office - I believe the tax office sends some sort of certificate confirming this. If they can't show this, then basic rate tax and NI is taken off their invoiced fees before payment. If they can prove their self-employed status, they get paid gross.

[Pottyone]

I am registered as self employed. I pay my NI and do yearly tax returns. My 2nd job is a very legit self employed post that gives me no option but to be S/E. They notify HMRC of my earnings anyway, as they do with everyone. I think I'm going to bite the bullet and put my fee up. Trouble is its hard to work out what my market rate is as the job varies from week to week. But I do think I should now be on more and read somewhere that despite the recession only a small percentage of people haven't actually had a raise.

[Pottyone]

i am a bookeeper/PA/secretary but do all sorts for him really. It can vary a lot, and the hours vary. My 2nd job is as an Avon Sales Leader and all Sales Leaders are self emp.

[Skyline D]

Being self employed in one capacity (with Avon, which is fine), has absolutely no relevance to whether the other job is self employed or not. It's not in the same line of business and the Avon thing would rightly be ignored by the Revenue in deciding whether or not you are self employed in the other job. I have to say on balance from what you've said so far that I think you are employed and I expect the revenue would too. You don't do book-keeping / pa work for anyone else, haven't suggested that you have tried to find other clients to do it for and he sets your pay rate. Even if you do decide when you do it that's employment for me, not self employment. Do you get holiday pay or sick pay?

You are right though, the main problems that creates are his, not yours. He would have employers NIC to pay and if he isn't already doing so, holiday and sick pay too. From your point of view there are some advantages with cash flow to being self employed and also the things you can claim against tax are much more generous to the self employed but then as you are self employed in another capacity you wouldn;t lose them anyway. I'd say it would be in your interest to become an employee but if he'd rather dispense with you than do that you are pretty stuck.