Volunteer, self-employed or employed?

The following is written in the context of very small groups which

  • are run by volunteers
  • are either unincorporated, charities, or incorporated as CIOs, CICs or businesses
  • have no more than 15-20 people working for the group as teachers or administrators, and for only a few hours per week
  • have a turnover of less than £50,000 or so

Please note that the following is for your information only and does not constitute legal advice.

Definition volunteer, self-employed and employee

A volunteer works voluntarily and is not paid for their work, but they can be paid for their expenses Volunteer opportunities, rights and expenses: Pay and expenses – GOV.UK (www.gov.uk) 

People paid for their work are either self-employed, workers or employees Employment Status | Factsheets | CIPD . These statuses come with different responsibilities and rights on both sides and towards the government.

Wages

If you pay someone for the work they do for your group, you have to pay at least the minimum wage or better, the higher living wage for Cambridge Minimum wage rates for 2024, Living Wage – Cambridge City Council . You can make additional payments for expenses.

Paying employees

You may decide to employ your teachers and administrators, and use the services of an accounting company to do the payroll, taxes and related matters for you.

What makes someone self-employed? – Employment status for tax purposes

If your teachers and administrators are genuinely self-employed, your group has the least commitments towards them. It is up to you whether or not to have a contract with them and the content of the contract (see below) but whether someone is self-employed or not is determined by the circumstances, not by what you write down. Generally, the more independently and self-directed someone works, the more likely they are self-employed.

In England, there is a difference between the general employment status and the employment status for tax purposes. These two can differ from each other and your main concern if you run a small group is to find out who has to pay the income tax to the government, you or the person working for you, i.e. what is their employment status for tax purposes. The government has this tool Check employment status for tax – GOV.UK (www.gov.uk) to check the employment status. both from your group’s point of view as from the teachers’/administrators’ point of view.

You may want to fill it in for each of the people working for you, or groups of similar people, to get a feeling for what self-employment for tax purposes means, and keep a copy for your records.

Paying income-tax

The current threshold (April 2023) before someone pays income tax is £12,570 per year Income Tax rates and Personal Allowances : Current rates and allowances – GOV.UK (www.gov.uk) meaning that people earning less than this can keep the total earnings.

If they earn more than £1,000 a year, self-employed workers have the duty to fill in a tax self-assessment form each year Self Assessment tax returns: Overview – GOV.UK (www.gov.uk) to declare their income towards the government. It is not your duty to ensure they do it, but you should inform them about the requirement (for example in your contract or agreement with them).

Contracts/agreements with your teachers/administrators

It is generally good to have a written and signed agreement or contract with your teachers to set out the ground rules about duties and payment, but which also includes references to your behaviour, safeguarding and other relevant policies. This is not about legal enforcement, but about making sure certain information has been received and is understood.