What is a Sole Trader
A sole trader, also know as “one man band”, are normally individuals that work alone and have a self employed status. The sole trader will undertake all cleaning and ironing work within your home usually. The sole trader would be responsible for a self assessment annually, paying their own taxes and national insurance contributions and for their business insurances. Should the sole trader start to take on employees, they must be registered with the HMRC as an employer so that the appropriate taxes may be paid and have their insurances amended to cover more than one individual.
The Pros of using a Sole Trader
- Flexibility of work undertaken within the home
- Flexibility of price as the sole trader has minimal overheads – the general rate for a sole trader is typically £7 – £8.50 per hour, although some self employed cleaners do charge up to £10 per hour.
- The relationship between client and cleaner can sometimes be more personal as the cleaner can almost become an extension of the family as it will always be the same cleaner at the home
The Cons of using a Sole Trader
- If the cleaner is not registered as self employed with the HMRC and is working “cash in hand” for the client, weather the client is aware or not – this changes the relationship to an employer/employee relationship and if investigated the client may be fined for not registering as an employer by the HMRC - It places the homeowner in a difficult position as they will been seen as the employer and investigated for the correct legal trading status, tax and PAYE affairs
- The cleaner may have minimal level insurance or no insurance at all – When interviewing potential cleaners always ask for a copy of their insurance details and would also recommend calling the company the insurance is held with to validate the policy to ensure your home is protected against damage, spills or breakages
- If the cleaner is sick/on holiday/breaks a leg etc. the client would have no cleaning service
- If the cleaner decides to quit or close their business the client would have to go through the process of advertising, interviewing, vetting the cleaners references and designing a rota for a new replacement cleaner
- If the client is unhappy with the clean or the service the client would have to confront the cleaner directly to resolve the issues
Check list for a employing a self employed cleaner:
1) Does the cleaner have references you can telephone to ask about the cleaners service, reliability and standards?
2) Can the cleaner supply the client with a copy of insurance details?
3) Can the cleaner supply proof of self employed status, such as government gateway number or proof of employer status by way of their employer code?
4) Does the cleaner sub contract out work when on holiday/poorly – Who to? Who’s insurance is the replacement cleaner covered by?