TRADING> trawls for charity shops

I know it may be a bit late in the game for this reply but just in case anyone else has the same type of query:

In a previous life I dealt directly with self-employed sales representatives working both for charitable and for-profit companies. Our legal advice at that time suggested the following -

As Gerry mentioned, a person can be classed as self-employed provided they have registered as such and are free to undertake contracts with other organisations - ie. they are not contractually obliged to work only with you. The fact that they only choose to work for you is not your issue.

It is not your responsibility to make sure they pay their tax but you must make it clear in any contract you have with them that they are self-employed and not an agent or employee of your group. Furthermore, you cannot dictate to them working hours etc....

If they are classed as self-employed them you can treat them like they were any other company or organisation you might deal with. From your point of view, you might have to class them as a commercial participant in a fundraising program as defined by the Charities Commission - if so you need to make it clear to 'donors' what the cost paid to them are.

Finally, make sure you have a solid self-employment contract with them which will allow you to avoid any fall out if the relationship did break down.

For an overview of self-employment try these sites

[url]http://www.stagesafe.co.uk/freelancers.html[/url]

[url]http://www.direct.gov.uk/Topics/Money/TaxOnEmployment/TaxOnEmploymentArticle/fs/en?CONTENT_ID=4015975&chk=yjXuiZ[/url]

Hope that helps

[email]mark@enjoycards.com[/email]

Date: Tue, 19 Nov 2002 12:44:29 -0000
From: Andrew Scadding

We were a member of a collecting-tin consortium some time ago, which sounds
pretty similar inasmuch as it was three charities working together within a
formal relationship but without incorporating the scheme as a separate
body/charity. The advice we received at the time (from rather expensive and
well-known charity lawyers) was that anyone paid had to be an employee of
one of the charities, and costs reclaimed from the group.

If your person is doing one job working for the consortium, I don't think
you have any choice under current Inland Revenue rules other than to treat
them as an employee. If you don't, and pay them gross, the Revenue may come
back at you for tax payable as though the gross pay were net and you had
retained the tax. That would be expensive.

Kind regards

Andrew Scadding
Pattaya Orphanage Trust
[email]ascadding@pattayaorphanage.org.uk[/email]

Date: Tue, 19 Nov 2002 11:56:03 GMT
From: Gerry Beldon

Hi, Rosemary

There are two key questions here. Firstly, are you jointly employing
the "trawler"? If so, is your consortium separately established so that
it can employ someone? If not, it may be wise to have one of the
participants do the employing, and have the others pay for their
proportion of the work.

Question 2 : does "trawler" derive all or most of their income from
trawling for you?

Inland Revenue are very tight on stopping "self-employed" being used as
a tax dodge. Unscrupulous employers offer full-time work without
employed status to avoid their obligations, and unscrupulous employees
try to avoid paying Tax and NI.

On the other hand, if someone is genuinely self-employed, Revenue are
perfectly happy, provided the right forms are completed and the
appropriate tax and NI paid.

Ask yourself firstly how many hours the "trawler" works, and whether he
works for anyone else. Secondly, ask yourself how the work is
controlled : do you tell him where and when to trawl, or how many hours
per week? Does he have a "trawling" contract with you?

If you are seriously concerned about court action, ask the Inland
Revenue directly for a ruling. I've found them to be very helpful these
days, and once you have your ruling (in writing, of course) there will
be no more questions. Having said that, they will err on the side of
employed status, but if there is a genuine case for self-employed they
will advise you.

Cheers

Gerry

--
Gerry Beldon MInstF
GERRY BELDON INDEPENDENT FUNDRAISING
phone/fax : 0191 251 6720 =/= mobile : 07976 405721
[url]http://www.beldons.co.uk[/url] =/= [email]gerry@beldons.co.uk[/email]

Date: Mon, 18 Nov 2002 17:21:51 -0000
From: Rosemary Rodd

I suspect the answer may be that our situation is so complicated that it
would need a test court case (which we certainly want to avoid!) to get a
certain decision. "We" are a consortium of three small linked charities who
share trawling facilities but have separate accountants and legal advisers
who disagree on what the status of the person doing the trawl ought to be.
All they appear to agree on is that we could end up being taken to court if
the relationship breaks down - but for different reasons depending on which
status we go for :(

I was really hoping there might be other groups out there doing something
similar who have managed to survive without being sued (or who have awful
warnings about the inadvisability of permitting self-employed
status/employment rights)

Rosemary Rodd (rr25@cam.ac.uk)

Date: Thu, 14 Nov 2002 20:20:16 -0000
From: Mark Astarita

If he is only working for your charity then these days you will probably
find he should be treated as an employee. Legal advice would be wise I
suspect. Afraid the days of the self employed are becoming numbered for
many types of contracts as you described.

Mark Astarita
Deputy Chief Executive
The National Deaf Children's Society
15 Dufferin Street, London EC1Y 8UR
email [email]mark@ndcs.org.uk[/email]
switchboard 020 7490 8656 (v/t) fax 020 7251 5020
[url]www.ndcs.org.uk[/url]
Registered Charity No 1016532

Date: Wed, 13 Nov 2002 10:46:35 -0000
From: Larry Boyd

> employment status of the person(s) doing charity shop trawls for
donated goods?

Your local volunteer service bureau may be helpful with this kind of
question. Employment law is complicated -- probably too complicated to
deal with in a forum like this. Our volunteer bureau has helped us
revise all of our employee and volunteer policies and procedures.

++++++++++++++
Larry Boyd
Tools for Self Reliance
Website [url]www.tfsr.org[/url]
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Practical help for practical people