Employee v self employeed

Hi Guys

My partner has got a new job and the company want her to go selfemployed.

I have two questions if she goes through an umbrella company will she be on prsi class s and made a 50% shareholder of the company

As this job will be a 37.5 hr week how can she be classed as a contractor as we looked at the revenue guide on self employed v employee and she wont be able to look for other clients etc.

Thanks for any replies

Hello Apple.
There are strict guidlines dealing with self-employment. You have to be able to show your responsible for your own costs, all risks, own premises. The company presumably want to avoid paying theie share of prsi and holidays which you are not entititled to as self-employed. The revenue do spot checks but it is common especially in the construction sector

Sounds like they eant her to set up a company - tht is legal if she operated through company.
She can either use an umbrella company or set up her own company

If she applied for a job and was offered it, she is an employee and should be subject to normal PAYE. One cannot simply opt out of the system.

She should bring this to the attention of her employer. They are foolish to be trying to get employees as self-employed as the employer would be vulnerable to an unfavourable tax and prsi assessment.

www.revenue.ie/en/tax/it/leaflets/rev_dsw.pdf

that link does not seem to work.
Go to revenue.ie and search for

Employed or Self-Employed

Brendan

Another thing to watch out for is if she became unemployed in the future - class S PRSI does not qualify for Jobseeker's Benefit.

If she goes the umbrella company route, she should be paying normal employers' prsi of 10.75% and Class A1. Not class S.

If she does not pay this, then she has an exposure in the event of a Revenue Audit.

If choosing the umbrella company route she can be an employee (not a director or shareholder) of the umbrella company in which case she will pay Class A PRSI like any other employee. If her PAYE & PRSI is being paid correctly as an employee of the umbrella company Revenue won't have an issue with her "contractor" status, they will just view her as a PAYE employee.

This seems like a bizarre scenario. Intuitively, the (potential) employer encouraging your partner to "go self-employed" would seem to be an attempt to create a sham arrangement to avoid employers PRSI and an employer's obligations to an employee. Tread very carefully...self employed individuals may incur additional expense in meeting their filing obligations (tax advisers ec). As other posters have pointed out they do not qualify for the same level of social welfare payment as individuals in PRSI clas A1. And in the event of a termination of the employment, your partner would not be entitled to redundancy payments. Simple things like free or subsidised dental care disappear. And if Revenue examine this arrangement your partner will have the inherent hassle at a very minimum.