Introduction to Self Employment
As is evident from the various family friendly policies, these apply specifically to employees; they do not apply to workers (of which there is a particular definition) or to those who are genuinely self-employed.
Employment legislation makes a clear distinction between those who are in employment, and under the employer’s control in terms of what they do and how they do it; and someone who is self-employed, who has the flexibility to pick and choose for whom they undertake particular pieces of work, when they do this, and most importantly are in business on their own account.
Genuinely self-employed individuals do not have the range of employment rights and protections of employees and so considering starting a family is a far more financially precarious venture than is the case for those who are employed, who have the protection of the various periods of statutory leave as well as pay. There is also job security in knowing that they will be able to return to their job once their maternity (etc) leave is over.
In contrast, those who are self-employed who have to stop work to have children or look after them, won’t get paid if they don’t work. While women who are either workers or self-employed may claim maternity allowance directly from Social Security (rather than being paid it through an employer), the same is not the case for fathers who take time off from their career to look after children or support their partner.
There is a general presumption that if someone is self-employed it is out of choice. However, this may not always be the case; the individual may only have been offered engagement as a self-employed individual and not the opportunity to be employed under a contract of employment, which carries with it rights such as entitlement to minimum wage and holiday as well as the family friendly rights detailed elsewhere on this site.
It is worth bearing in mind, for both employers and individuals, that someone whose letter of engagement is one of self-employment may as a matter of practice fulfil the criteria of being an employee. If the individual works under the employer’s Instructions, to their hours, is under the employer’s control, and is subject to their instruction and policies, whatever the documentation may say, for the purposes of employment status they may well be considered an employee. This could well be the case even if the individual is paid gross upon submission of an invoice, and accounts to HMRC for their own tax and national insurance contributions.
Employment or self-employment status is determined, not by documentation but by what happens on the ground in practice. To be blunt, if someone looks like an employee and walks like an employee, they probably are. This means that if they were to challenge a failure to provide them with, for example, paid holiday or minimum wage, as a matter of law they may be found to be an employee, and so entitled to these rights.
There is specific advice related to self-employment and parental leave on the website, Maternity Action, which includes advice on benefits, rights during pregnancy, maternity allowance and rights for self employed fathers.
There is also a lot of useful information on various government websites regarding self-employment, some of which include videos on self-employment topics. The most useful of these are: –
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- For an overarching summary of self-employment, there is a series of videos covering popular self-employment topics
- There is a page illustrating the steps of setting up as self-employed
- The government page for “Business and self-employed” covers both companies and self-employed people, but there are pages that are relevant to both, such as expenses, exporting, licences, sale of goods and services, data protection, trade marks
- In relation to benefits there is a government page covering self-employment and universal credit
- In relation to tax, there is a government page covering self-assessment
- There is also a HMRC helpline at 0300 200 3600
- Money Helper (previously the Money Advice Service) is a free service provided by the Money and Pensions Service (sponsored by the Department for Work and Pensions). It has articles covering self-employment here
- There are also financial tools and calculators to assist with budgeting, financial planning and decision making, pension planning here
