Every Tutor Agency is currently reviewing how they run their business. This is because of a result of a recent legal case. For most agencies, this means making changes. This, in turn, means changes for tutors who work with Tutor Agencies.
Here are 3 things which you, as a tutor, need to know:
(1) Tutors – what’s your status?
Your work status is important. Are you:
- an employee of the Tutor Agency or
- running your own business? This is sometimes also called a freelancer, consultant, contractor or sub-contractor.
As an employee you have certain benefits and rights. For example, you will be entitled to holiday and sick pay. As a freelancer, running your own business, you have more flexibility. For example, you can choose how and when you work. You are not entitled to holiday or sick pay. It’s up to you to think about what’s best for you. There are pros and cons to both. However, you must be clear about your status with any agencies you work with.
Traditionally, most Tutor Agencies have worked with self-employed freelance tutors. These tutors are not employees of that agency. Instead, they are classed as self-employed or are directors in their own limited company.
Of course, some tutors are already confidently running their own registered business. However, there are tutors who will need to review their own status. For example, tutors who are
- already employed full-time in schools and providing tutoring as an extra and/or
- working on a part-time basis
Some agencies will be considering taking on tutors as employees and they will be issued with an employment contract.
For those tutors who aren’t employees of an agency (and being paid through PAYE) they will need to operate as a businses. This might be as
- A sole trader or freelancer or
- Forming a limited company (you are usually also the sole director and shareholder) or
- Forming a partnership (such as a training business) with other tutors
The rules about running a company can be complex. Most tutors start out working alone. They choose to register as being self-employed with HMRC. There are pros and cons to the different types of business and you may want to take advice about what’s right for you.
(2) Your accounts
Keeping accounting records is less of a problem if you are an employee. The agency will issue you with a payslip which shows you what PAYE deductions are being made. If this is a second job (e.g. you’re already employed by a school) you’ll need to check your agency tax code and deductions. This is to avoid being charged too much (or too little) tax and other deductions.
As an employee you will also have certain rights, such as pro-rata holiday pay and sick pay. Make sure that you’re aware of and understand these rights.
An alternative for some tutors is to work via an umbrella company. You become an employee of that umbrella company who then ‘hires’ you out to a tutor agency. Working as an employee for an umbrella company also means you get employment rights.
(b) Freelance Tutors – running your own business
If you’re a self-employed or a freelance tutor you need to make sure that you are registered with HMRC. This means registering
- as a self-employed person or
- registering your company if you have your own Private Service Company (PSC).
You will need to submit invoices to the agency who will then pay you. Check your agreement with the agency to check how and when payment will be made.
Either way, you’ll also need to keep your own accounting records. This must include what you bill the agency for (your invoices) and your expenses (for example, equipment, travel, at least a proportion of IT costs if you’re tutoring online). It may sound daunting but there are lots of accounting packages you can use to make it easy.
It’s important to be properly registered. Most agencies will be filing a quarterly report with HMRC giving details of which self-employed (non-employee) tutors are working with.
As an employee you must follow the direction provided by your employer. It may mean less flexibility in how you deliver tutoring. For example, the agency may use their own resources. It also means accepting any tutoring which is assigned to you (with few exceptions such as safety issues).
However, as a tutor who is freelance (running your own business) you are your own boss. It means that you’re not under the supervision, direction and control of an agency. This gives you control over how you deliver your services. However, you will have a written agreement with the Tutor Agencies you work with. Your responsibilities will be written in that agreement so it’s important that you read the written agreement so you are clear about your responsibilities. For example, a Tutor Agency will have a safeguarding policy and will probably also have a cancellation or rescheduling policy. Make sure that you’re clear about all the things the Tutor Agency requires you to do.
As a tutor you will need to prepare for change. We’re scheduling a free session for freelance (self-employed) tutors. If you’d like to be included please complete the form below. Please can you also let us know if you have any specific questions you’d like us to include.
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