In this section:

  • Employee wants to work on freelance/self-employed basis

Employee wants to work on freelance/self-employed basis

Whether someone who works for you should be treated as employed or as self-employed depends on the terms of your working relationship. The fact that the employee would prefer to be treated as self-employed carries almost no weight.

On this page:

Is the worker employed or self-employed?

Before considering making any changes to your PAYE (Pay As You Earn) arrangements for the worker, you must first check whether there are any grounds for reconsidering their employment status.

The links below provide comprehensive information on employment status. A general guide is that a worker is likely to be self-employed if they:

  • can decide what to do, where to provide their services, when to work and how they do their work
  • risk their own money in their work
  • can make a loss as well as a profit from their work
  • provide the main items of equipment they need to do their job
  • are free to hire other people to do the work they have taken on, or to take on helpers at their own expense
  • are responsible for correcting unsatisfactory work in their own time and at their own expense

Find out more about employment status

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PAYE if there's a change from employment to self-employment

If the status of someone who works for you changes from employed to self-employed then you will no longer have to operate PAYE for them.

Instead, you will pay them gross for any work they complete for you, and it will be their responsibility to ensure that the necessary tax and National Insurance contributions are paid to HM Revenue and Customs (HMRC).

You will have to complete and file a form P45 for the worker to inform HMRC that they have left your employment.

More on the procedures to follow when an employee leaves or retires

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