I hope someone will be able to help me. I have a potential client who has just started to go it alone doing fencing (domestic gardens). He pays someone to help him on a self-employed basis, who invoices him every week. I informed that this could actually be seen as him employing him but trying to avoid the associated costs of employing someone. I asked if he could employ this person but he says as he has just started up he couldnt afford holiday pay etc and that due to the nature of the work there will be little or no work over the winter period so would not be able to pay him then either. The person works elsewhere when not needed however he is likely to be needed a lot over the summer months.
I have completed the tool checker on the hmrc website which helps to decide whether it is classed as employed or self-employed but it has come back as unable to make a determination. I'm guessing due to the very fine line of this.
Can anybody help on how i can advise this man? I'm thinking i should be advising him that he should be employing this person but if he genuinely can't afford to then are there any systems he can put in place? I've done quite a bit of research on the internet and it appears he can have paperwork in place (contract for services etc) but its the actual relationship that hmrc will use to determine this.
Any help on this would be much appreciated.