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| Original Message Added : 14 Dec 2009 Michelle
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| Reply : 14 Dec 2009 You can't make people self-employed. However you can encourage them that it can be in their interest. They have to make themselves self- employed. Not everyone has the aptitude to employ themselves. Also once they become SE they do not have to remain loyal to you just as you do not have to remain loyal to them. You in effect become their customer. If they are hourly paid they would charge you more per hour as they now have to fund their own NI, Tax, Holidays, Sick Pay etc. Simon |
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| Reply : 20 Dec 2009 If you are taking over an existing business then the employees currently in place have the protection of TUPE. This is a vey complex area of law and you make need to take legal advice or a least deal with an expert. How are you proposing to make the existing employees self employed? You would have to end their current contracts of employment, which may lead to claims of unfair dismissal would you do this by means of redundancy? the definition of redundancy is around ceasing or intending to cease the business or carrying out work of a particular kind has diminished or ceased(I haven't gone into great detail here). If you do make the employees redundant then they are entitled to statutory redundancy payments if they have been employed for two years or more. There are also many issues surrounding whether an a individual is employed self employed or even a worker. You may call a person self employed but in reality it is your actions that determine the true nature of your relationship. Jayne |
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| Reply : 1 Jan 2010 I believe Jayne has covered some of the key areas that you need to consider. I would just add that you may need to think about other ways of restructuring the business. Being self-employed is personal choice usually and being self-employed is very different than being an employee. And some people find it impossible to adjust to the differences, not to mention the legal requirements attached to it as Simon mentioned. So there is likelihood that your employees may not go for the idea in which case if for example you then terminated their contracts by reason of redundancy they may have grounds to claim unfair dismissal if they have been working for the salon for 12 month or more. Lastly please also ensure that should you end up terminating the contracts of any of your employees; that you take care to handle it fairly in line with current dismissal procedures as an employer can dismiss an employee for a perfectly valid reason, but if the way in which it was handled was unfair then an Unfair Dismissal claim can be made. It would be great to know the outcome. All the best Anita
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| Reply : 4 Jan 2010 |
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| Reply : 31 Jan 2010 You need to be aware of employment legislation before jumping in at the deep end but this is not the first consideration. The questions about why and are you putting client loyalty to the salon at risk? is number one. Otherwise there is a major potential risk with VAT. Many salons did this several years ago and the major challenge that they faced was from the then Customs who argued, generally successfully, that the turnover of the stylists who rented the chairs needed to be accumulated with the salon trading income for VAT purposes. At that time there were many tribunal cases and many more back duty assessments held over pending tribunal decisions. The National Federation of Hairdressers vigorously defended a number of cases for their members and the eventual outcome was that Customs and the National Federation agreed the form and attributes of an agreement that could be used between the salon and the stylists enabling the turnover of the stylists to be kept separate. It is in my view quite a cumbersome form of agreement addressing just about everything from the actual space (licence to occupy - commonly referred to as chair rent) to who makes the tea and shared reception etc. Nonetheless all of these issues need to be addressed to avoid a challenge from HMRC on accounting for VAT. From memory the formal relationship with stylists is addressed comprehensively and I would suggest a good place to start is the National Federation. Following this through with advice from your accountant and perhaps lawyer comes next together with getting your stylists on board. This route is for the brave hearted and perhaps is more relevant for the larger salon where the stakes are considerably higher. Customs did not limit their challenges to large salons. bjn |
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| Reply : 30 May 2010 www.globalemployeebenefits.info |
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| Reply : 5 Dec 2010 We only charge 3% on the invoice value, but could be saving up to 40% in tax. Regards Marc du plooy GAP IT Services |
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