As a self-employed person, you have a good life. You decide when you work and with whom you do business. And also for what hourly rate. In short: you are the boss. But what if the tax authorities think otherwise and find you not so independent at all? Then you are dealing with false self-employment. We would like to explain to you how you, as an entrepreneur, can never get into trouble with this.
What is false self-employment?
Fake self-employment is when you say you are a self-employed person, but actually do the same thing as an employee. You may now be thinking: what difference does that make? Well, quite a lot. Because from 1 January 2025, the tax authorities are going to check this extra strictly. They will look at your working hours and the work you do, for example. If that looks a lot like what an employee does, the tax authorities may start to make things difficult. And that means less money and just a lot of headaches. You shouldn't want that.
DBA Act: False self-employment among freelancers
To prevent false self-employment, the DBA Act (Wet Deregulering Beoordeling Arbeidsrelaties) was created. With this law, the tax authorities look not only at what you have agreed with your client, but also at what you do in practice. Because do you really decide when you work? And do you also have other clients? Or do you work 'exclusively' for one client? Make sure that everything you have down on paper is not gibberish. Because they're gonna know...
A good example of false self-employment is meal delivery service Deliveroo. This company worked with "self-employed" delivery drivers. On paper, it seemed completely legally okay. Yet the court eventually found that this was nonsense and ruled that there was false self-employment. So even if you have a zzp contract, the Tax Office, and the judge, can say, "nope, you are an employee."
Criteria for false self-employment according to the Tax Authority
OK OK, so how do you know if you are really self-employed? Our friends at the tax office have made a checklist on which they judge you. Coming up.
- You are in charge of your hours. You decide how, where and when you work. Your client gets to say only what they want to see for results. How you do that is entirely up to you.
- You have multiple clients. Because if you only work 'exclusively' for one client, it is more like a job than an independent assignment.
- You bear the risk. Does a job go wrong? Then you feel that pain in your wallet. You also invest in your business with things like tools, software, equipment or other tools?
- You show that you are an entrepreneur. For instance, you have your own website, you are actively seeking new clients and know how to do several jobs at once. A little marketing can't hurt.
- The invoices come from you. You send invoices for your work. And are you sick? Sure you don't get paid then.
So check these points and ask yourself: is this me, or am I secretly just an employee?
False self-employment penalties
OK so suppose: you are doing bogus self-employment. So what happens when the Inland Revenue catches you? That's going to hurt both sides.
- You as a self-employed person:
- loses your self-employment deduction and other tax benefits. Bye-bye extra money.
- may have to pay back taxes. Even less cash, then.
- can seem a lot less credible as an entrepreneur.
- Your client:
- Must still pay back tax.
- Risk high fines for misjudging your working relationship.
- can also create legal hassles (pff, hiring a lawyer, litigation costs, uncertainty. In other words: headaches).
How can you prevent it?
Don't want a headache but just want to play the game by the rules? Understandable. Here are some tips!
For sole traders:
- Make sure you have multiple clients. Exclusivity does not exist.
- Be in charge of your hours. You decide when you work.
- Use your own work gear. Do not accept a 'loaner laptop' from the client, even if it sounds so chill.
- Stay on top of your administration later. Keep track of your hours and send those invoices on time.
- Make sure your agreements are in black and white in a contract. And stick to this contract too!
For clients:
- Give the zzp'er freedom. Don't micromanage and stick to work agreements.
- Don't lean on the same self-employed person for too long. Make use of other self-employed people so you don't depend on one.
- Put all working arrangements clearly on paper. There can be no misunderstandings.
Frequently asked questions on false self-employment
- What if I only have one client?
Well, it can be done but it is still tricky. Make sure you do have entrepreneurial risk and make it clear to everyone that you are self-employed. - Can I sign a zzp contract but still work as an employee?
Nope. As we said earlier, the Inland Revenue not only looks at how you work, but also at what is in your contract. Practice is key. - How do I know I am safe?
Use the checklist from the government’s tool from this article or ask us for advice. A little help will save you a lot of stress.
Prefer personal advice?
We know it's a lot of information. So it's understandable if you still have questions. False self-employment is complicated, which is why we are happy to help. We can take a look at your situation and help you sort everything out. That way, you can focus on your business. So ready for the next level? Ask advice and avoid hassles from the Inland Revenue.
