Am I considered as self-employed or as an employee?
About 95% of locums working through Interim Lawyers are self employed. Working on a self-employed basis gives both the locum and the law firm or in house legal department so much more flexibility and is better from a tax perspective.
However the question as to whether the assignment is classed as self-employed or employed also depends on the Inland Revenue (HMRC). For example if you worked for one firm for 3 years on a regular monthly salary payment equivalent, HMRC may well determine that your arrangement is one of an employee/employer and you would be treated as such from a tax perspective. It is quite clear however that locums engaged for short periods of time who regularly work for a wide range of law firms or in house legal departments are self-employed for the purposes of tax and national insurance.
Longer term or regular locum employment for specific fixed hours each week may be regarded by the Inland Revenue and contributions agency as salaried employment and therefore liable to PAYE and employer’s NIC. We have never come across an arrangement that has fallen prey to this, but you do need to be aware of the tax implications of just working for one firm for a lengthy period of time.
Posted in: Locums