Send us a textHave you ever hired someone who invoices monthly, works regular hours, and calls themselves a freelancer? That seemingly straightforward arrangement might be putting your business at serious financial risk. I'm shedding light on the murky world of employment status and why getting it wrong could lead to eye-watering tax bills and tribunal nightmares.Walking through the New Forest with my dog one morning, I received a simple client question about a freelance designer that sparked this vital conversation. The truth is, labels like "freelancer" mean nothing if the working reality suggests employment. HMRC doesn't care what's written on paper—they care about how the relationship actually functions day-to-day.This isn't just theoretical. TV presenter Adrian Chilles faced a £1.7 million claim from HMRC despite invoicing through his limited company. Kay Adams endured multiple tribunal rounds defending her freelance status with the BBC. Even Premier League referees have been caught in this web. The message is clear: no business is too small for HMRC scrutiny when it comes to disguised employment.I've developed a five-step freelancer sanity check that could save your business thousands: use the HMRC CEST tool and document the results; look beyond contracts to assess control and substitution rights; examine whether mutual obligation exists; review how long they've been with you; and avoid questionable tax schemes. Remember my buzzword: status is not static. A genuine freelance relationship can evolve into employment over time if you're not vigilant.The smart businesses I work with implement regular checks—like reviewing any freelancer doing more than 10 hours weekly every three months—and aren't afraid to reclassify when necessary. Getting this right isn't just about avoiding HMRC problems; it's about treating people fairly and sleeping easier at night. Need help reviewing your freelancer arrangements? Reach out at [email protected] or connect with me on LinkedIn before that innocent-looking freelance relationship becomes an expensive headache. Thank you for tuning in to Buzzing About HR with Kate Underwood!If you enjoyed today’s episode, don’t forget to subscribe, rate, and leave a review—your feedback helps us grow and reach more people like you. Have questions or need HR advice? Reach out to Kate Underwood HR & Training at www.kateunderwoodhr.co.uk, email us on [email protected] or follow us on social media for more tips, resources, and updates. Until next time, keep buzzing and take care of your people!

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