If you’re still not sure whether you count as self-employed, you can use HMRC Check Employment Status for Tax (CEST) tool to work it out for you. If you do qualify as self-employed, you’ll need to register and start filing tax returns.
The downside to all the freedom of self-employment is that you’re usually not entitled to most of the rights and benefits that employed people get. You do still have some protection about how you’re treated at work or how safe your conditions are, though.
There are actually a lot of different types of self-employment, with a few differences in how they’re handled in the law. Independent contractors, for example, are technically self-employed but often get classed as workers. This means they can get a few basic legal rights on longer-term contracts they take on. Obviously, any applicable Health and Safety regulations still apply as well.
Self-employed subcontractors working in the building trade almost always fall under a system called the Construction Industry Scheme (CIS). Under CIS, even though they still have to use Self Assessment, construction subcontractors get 20% of their pay deducted by the business contracting them. That money goes straight to HMRC as an advance payment against the tax the subcontractor will owe. There’s a section in the Self Assessment return paperwork that lets people hit by CIS claim back any overpaid tax the scheme leaves owing to them.
Freelancing is another form of self-employment. A typical freelancer does irregular work for a number of clients whenever they’re needed, without making any major or long-term commitments to any of them. Freelancers use Self Assessment for sorting out their tax and National Insurance, but tend to do all their work for other people businesses, rather than their own. Again, you don’t get a lot of employment rights as a freelancer, but you should still be protected under Health and Safety and Discrimination laws.