If someone is employed part time and is offered a part time contract by the same company as a freelancer does this cause issues?

The company dont want to offer the employee extra hours as its a new addittional contract that has a timeframe and they would not be able to sustain the extra hours when the contract has ended, therefore felt it would be better to leave the persons contact as it stands and offer them this contract to work on when they are not working in their set contractual part time hours/job. The contract would be a day a week and would be home based, its a very differnt job to the job contracted.

The individual is happy with the suggestion and would register with Inland Revenue in order to complete their own tax return for the contract work. Has anyone come across this before?

Any advice/examples welcome as we dont want either the employer or employee to have employment law issues.

Many thanks
debbee dale

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