Self-Employed exemption

Actors pay taxes as self-employed people, right?  So therefore the self-employed exemption must apply.

That is the way it usually works with most other professions.  But it is very possible to be classed as self-employed for tax purposes, but classed as a worker for employment law purposes.

Let’s look at the government guidance (businesslink):

The genuinely self-employed

The national minimum wage (NMW) does not apply to the genuinely self-employed. In most cases it is easy to distinguish between someone who is self-employed and someone who is a ‘worker’.

If a person is self-employed, then they probably agree a price for the job with the customer in advance and are paid by an invoice or a bill on completion of the job. They control their own time and decide whether or not to take each job. They provide their own equipment, keep the profit they make and bear any loss themselves.

Sometimes it is not easy to tell if a person is really self-employed. For example, if someone is paid ‘commission-only’ they may control their own time and keep a share of any profits they make, but they may not be genuinely self-employed if it is not them but someone else, usually their employer, who has to bear any losses that are made.

You should not simply rely on a person’s tax status when determining their entitlement to NMW, since someone who has been assessed as ‘self-employed’ by HM Revenue & Customs for tax purposes may not necessarily be self-employed for the purposes of the NMW.

If you are unsure, you can call the Pay and Work Rights Helpline on Tel 0800 917 2368. If a dispute goes to court, the tribunal will look at all the facts – such as those described above – then make a decision on any entitlement to NMW.

It is important to note that the law on the NMW reverses the burden of proof in civil cases, so it will always be for you to prove that you don’t employ any person that you claim is self-employed.

via Who need not get the national minimum wage – self-employed, directors and some apprentices | Business Link.

Some useful links:

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