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Can You Be Self-Employed and Only Work for One Company?

It’s not unusual to be self-employed and only work for one company. Just think about all the Uber, Amazon and Deliveroo drivers out there. So if you have found your first client, accepted work on a large project or have a full-time job and work with a single client, then you’re not alone!

Even though working for one company is common, there are some HMRC rules you need to be aware of just in case you or your employer inadvertently step over the line.

In this post, I’ll share with you the rules you need to be aware of if you work for one company as a self-employed person, contractor or freelancer.

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

1. Can You Be Self-Employed Working for One Company?

It’s normal for businesses to hire self-employed people to work for them on an ad hoc or long-term basis to fill short-term roles, get support on a one-off project or access a specialist skill set where recruiting a full-time employee may not be the right choice.

However, in some cases, businesses are using self-employed contractors to avoid their tax and statutory obligations.

2. Disguised Employees and IR35

When a company employs someone, they are legally obliged to:

  • Provide a payslip and work out their tax;
  • Pay employers national insurance at 13.8% of gross salary;
  • Provide holiday pay;
  • Give statutory benefits such as maternity leave and sick pay;
  • Protect employees against any discrimination relating to gender, sexual orientation religion and disability;
  • Make sure their health and safety are protected;
  • Pay pension contributions.

When a Company takes on self-employed people, they avoid almost all of these responsibilities.

As a self-employed worker, you’ll get paid by submitting an invoice to your client for your services but you are not entitled to statutory benefits like sick pay and are responsible for working out your own tax.

For those who are genuinely a self-employed person, this is absolutely fine.

But in recent years, businesses have used self-employed workers to fulfil their job roles, instead of employing them to pay less tax and national insurance as well as being able to provide less employment rights, like holiday pay.

Some self-employed workers have accepted this arrangement because people who have their own business typically pay less tax through self-assessment than workers who are employed.

This is mainly because self-employed national insurance rates are lower and they can offset business expenses resulting in lower income tax.

This has made HMRC worried.

An individual who is registered as self-employed but in reality is an employee is known as a disguised employee. The rules apply to Limited Company owners too and whether the person works full-time or part-time.

The term disguised employee is part of the IR35 tax law which was initially launched by HMRC back in the year 2000. It is designed to identify workers who operate through Limited Companies and self-employed contractors but are fulfilling the role of an employee but get paid for their services via an invoice to ensure they pay the right amount of tax.

Read => A Simple Overview of IR35 for Freelancers

3. Can You Be Self-Employed and Only Work for One Company?

Yes, in some cases individuals can legitimately be self-employed and only work for one company, for example:

  • They are new to self-employment and have found their first client
  • Have a full-time job and with limited time can only sustain a single client
  • They are contracted for a long-term project
  • Can prove they are operating outside the IR35 tax law

4. Are You Self-Employed?

As part of the IR35 tax laws, HMRC looks at the true nature of your engagement and beyond any paperwork including contracts, having a UTR number and invoicing to decide whether you are truly self-employed.

HMRC will ask certain questions to help decide your employment status, known as badges of trade which includes checking if you:

  • run your own business, responsible for the success or failure of your business and can make a loss or a profit;
  • are able to decide what work you do and when, where or how to do it;
  • can hire someone else to do the work;
  • responsible for fixing any unsatisfactory work in your own time;
  • your client agrees to a fixed price for work – it doesn’t depend on how long the job takes to finish;
  • use your own money to buy business assets, cover running costs, and provide tools or equipment for your work;
  • not restricted to working for just that organisation.

So if you are self-employed but your client dictates where you work, when and how, then you might fall inside IR35 and be deemed to be an employee for tax purposes.

5. How Long Can a Self-Employed Worker Work for The Same Company?

There is no time limit that a sole trader can work for one company. So, if you have been working with a client for some time and developed a close working relationship, there is no reason to stop your arrangement.


How to Check Your Employment Status

HMRC have an online tool to help you check your employment status to work out if you are employed or self-employed. Alternatively, you can call HMRC on 0300 123 2326 to discuss your situation.

Can a Company Make You Go Self-Employed?

By law, a company cannot make you work for them on a self-employed basis. But it’s easy to feel pressured into accepting an arrangement that doesn’t feel right.

Always be cautious before accepting any arrangement that you’re not comfortable with. Going self-employed means you will no longer receive a payslip and will pay tax differently which includes:

– reporting your income to HMRC;
– calculating your own tax;
– filling in a self-assessment tax return;
– losing your employment rights.

Want to Read More About Self-Employment?

If you’ve enjoyed this post you may like to read more about being self-employed. Here are some of my most popular blog posts on this topic…

Any Questions?

I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.

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