Content
U-Turns Galore
Premises, Promises
Filing Bonus
RIP: 0% Rate
His and Hers
Party Spirit
State Of The Union
VAT's The Point?
Going Dutch
Away Win For Revenue
WIP-Round
The Best Land Plans
Tax Free Gizmos
Where Theres A Will
Do You Work Here?
Out Of The Shadows
Sacrifice Works
Home Sweet Office
Sauce For The Goose
Blissful Ignorance
PC Or Not PC?
Lost On Penalties
Worth The Paper
Carry The Can
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Employed or self-employed? It's a long-standing argument between the taxpayers and the Revenue. Changes to the law have abolished the old words - "Schedule E or Schedule D" - but the problem is the same. A large number of different tax rules are affected by the distinction, but perhaps the most important and obvious ones are the payment of tax - PAYE or self-assessment - and National Insurance Contributions - the higher Class 1, or Classes 2 and 4. Now the Revenue have come up with a device on their website to help you decide which you are - you can find it at www.hmrc.gov.uk/calcs/esi.htm. A cynic might say that the Revenue pay the piper so they call the tune - it's more likely to give the answer that you are employed. But it does include a number of important tests that the courts have used over the years, so at the very least it tells you whether you are likely to have a dispute with the taxman about your status. The issue is not just important for the individual - if anything, it's more critical for the person the individual works for. If you are an employer, you have to account for PAYE and employer's NIC. If you don't - because the worker said "I do my own tax" - the Revenue can take the money off you anyway, with a penalty to go with it. That's so even if the worker was honestly paying the tax, and no-one was trying to evade anything. The Revenue get more money from employees than the self-employed, and they will want to enforce the correct status when they can. If you are not sure whether you are self-employed, or you are not sure whether your workers are self-employed, you can use the Revenue's guide as a starting point. But if you aren't sure about the result, or you are unhappy about the result and you want to know if you can argue with it, we will be happy to discuss it with you. |
© Bayar Hughes & Co., 2010.