Who To Report To?

[Maydup]

A business I use insists on their skilled staff being self employed yet they also insist on them signing a contract to say they won't carry out the same trade for anyone else. 
That doesn't feel like being self employed to me, and to make matters worse, these skilled staff have recently had their hours cut drastically and many are struggling to make ends meet. 
I feel like reporting this business as they just can't have it all ways can they? Would HMRC be the place to go to help free them up to be properly self employed?

[Maydup]

Let's pretend the business is a vets. It's not but it's a reasonable comparison. 

The owners are both vets and they have 4 self employed vets working in their practise. They provide all the equipment, the utilities, the receptionist, the marketing and the customers. They set the prices. 
The self employed vets carry out whatever work is booked into their diary by the receptionists. At the end of the month they are paid 50% of whatever the customer has paid the business for the treatment. They receive it via bank transfer with a statement.

That feels like employment to me but if it isn't then HMRC can check them out and take it no further.
 

Recently the vets (reminder that they are not really vets or earning at that level) has decided to reduce their opening hours from 6 days to 4 days per week. But the self employed vets are not allowed to work elsewhere. One or two have been reduced from 5 days to 3 and will obviously have to leave. It's all come as a shock to them and being self employed, they have no employment rights. 

My point is that the business cannot have it both ways. 

[Peter Pedant]

 and why do they do it if they're not happy?

Naomi I think you should ask Abby that one. 

My cousin after immigration cleared tables in a caff in Yeovil having run a 5000 ac farm in ASouth Africa. I needed the  money he explained. oo-er Mrs !

[Peter Pedant]

Oh right what do the workers do

seek legal advice and get their contracts declared a contract of employment then sue for wrongfull dismissal is  my first stab

what do YOU do

first stop HMRC - AB cant cure EVERY wrong in this world Maydup

[Peter Pedant]

Tax evasion is a good reason to do it. 

 If they're self-employed they'll be paying their own tax - and National Insurance.

tax evasion - the  national insurance conts for the self employed are completely out of kilter. This has occurred before - IR successfully attacked the" builders lump" where everyone on a building site was self-employed. 

The advantage? both sides ( or else there wouldnt be legislation) employers dont have to pay the nat insurance conts which are NOT made up by the self employed conts. Naomi, clearly you havent been a tea-lady on a building site !

HMC concrete springs to mind, and googling we find

https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm7030

golly gosh that was early ! and there is a whole slew of them. They need a lawyer

[gylly]

They are not genuinely self employed.  A genuine self employed person provides their own tools.  

https://www.gov.uk/employment-status/selfemployed-contractor

This guide also states that someone who is self employed also submits invoices for work done, which by the sound of it isn't happening.

[lolasmam]

Both the company and the workers are at odds with HMRC regulations. There are stringent criteria for self-employed status, including the ability to set one’s own rates and working hours. It appears the company is attempting to circumvent employer obligations such as National Insurance contributions, mandatory pension schemes, and statutory holiday pay by classifying workers as self-employed.

If we are discussing hairdressers, typically, they set their own schedules and rent a chair from the salon owner, which constitutes genuine self-employment. It is crucial to inform these workers that, as self-employed individuals, they are not restricted from seeking additional employment elsewhere.

[Peter Pedant]

blimey Gylly thanks

[Maydup]

Thanks all. In order to be given the work originally they had to sign the Ts&Cs which stipulated this illegal exclusivity. This is to stop them from poaching customers I think, and as in my example,  going to their premises to treat their pets outside of paid hours. Or having their own small practise and competing for business. They would have to leave in order to work elsewhere. 
Its a can of worms!

After careful consideration I will probably lodge an anonymous report to HMRC and leave it at that.
 

[Toorak]

The problem is that they agreed to the terms and conditions so could be construed as complicit in any tax avoidance that is identified. I advise against doing this: they need legal advice.

[THECORBYLOON]

You can use this link to answer various questions to establish whether they are employed or self-employed.

https://www.gov.uk/guidance/check-employment-status-for-tax#who-can-use-the-tool

[newmodarmy]

^ wrong thread?