Are workers employees?

2020-10-07T22:55:00+01:00October 11th, 2020|Categories: Blog|Tags: , , , , |

It is important to know whether a worker is employed or self-employed as there are many differences in the way in which they will be taxed. Broadly, employees are taxed under the PAYE system with income tax and Class 1 national insurance contributions (NICs) being deducted from payments made to them. Class 1 NICs are also payable by employers. In contrast, the self-employed pay income tax and Class 4 NICs direct to HMRC, and are also currently liable to Class 2 NICs. Some important differences are that: currently, self-employed people have a lower liability to NICs than employees (especially [...]