Content
After U, Gordon?
Ups And Downs
Gift Horse
What A Relief!
Second Thoughts?
Last One Out...
Penalty Shoot-Out
Ain't Necessarily So
Going, Going, Gone
Papers In Order?
Death And Taxes
Passing The Buck
Hire Higher
Back Taxes, Taxes Back
Options Open
Extortion?
Sick Note
Cats And Dogs
Old-Fashioned Money
I Thee Endow?
Mother's Rights
Countdown
Nowhere To Hide
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Suppose someone does some work for you and claims to be self-employed. You pay them gross, and they - being honest and upstanding - declare it all under self-assessment. Then the Revenue inspect your books and argue that they ought to be within PAYE. What's the problem, when the money's already been taxed? The first problem is that there might be more tax under PAYE - and more national insurance. So HMRC have a reason to be picky. The second problem is that until 6 April 2008 the law said they had to collect the money from the employer except in very restricted circumstances. If the employee had already paid the tax, the Revenue couldn't offset that against what the employer owed - it was something that had to be sorted out between the employer and the employee. The rules have changed for the better. Where this sort of mistake is discovered after 6 April, even if it relates to an earlier year, the Revenue can issue a direction to offset the tax they already have against the employer's PAYE liability. The employer will still have to pay any excess, and can still suffer penalties based on the gross amount of the error, but at least the law no longer seems to give the taxman the money twice. If you want to make sure you are operating PAYE correctly, or if you get into a dispute about it with the taxman, we will be happy to advise you. |
© Bayar Hughes & Co., 2010.