Difference between contractors and employees for payroll tax

[CC07 PEU]

Are there ever any circumstances when a company would offer a short term contract position and have that person on the payroll rather than the contractor issuing an invoice for the work? If so, what would the reasons be for this as I understand the company saves tax by not having the person on the payroll?

[malks222]

protect themselves from IR35?

Liability- eg the insurance risk for a contractor would be too high, but if they are an employee protected under the businesses own insurance?

Sensitive information- technically would be giving and business access to certain information that may be against company policy?

contract with agency- agency may only employ people as paye/umbrella and not engage limited company contractors

there may be more, but these are reason I have come across.

[CC07 PEU]

malks222 said:

protect themselves from IR35?

Liability- eg the insurance risk for a contractor would be too high, but if they are an employee protected under the businesses own insurance?

Sensitive information- technically would be giving and business access to certain information that may be against company policy?

contract with agency- agency may only employ people as paye/umbrella and not engage limited company contractors

there may be more, but these are reason I have come across.

Ok, that's really useful to know, thanks.

[Eric Mc]

HMRC is cracking down on people who try to pretend that they aren't really employees or who are hired by organisations and told by that organisation that they will only be hired on a "self employed" basis.

The era of "pretend self employment" is drawing to an end.

[CarlosFandango11]

CC07 PEU said:

Are there ever any circumstances when a company would offer a short term contract position and have that person on the payroll rather than the contractor issuing an invoice for the work? If so, what would the reasons be for this as I understand the company saves tax by not having the person on the payroll?

In some industries, the amount paid to an individual on a fixed term contract may be significantly less than that paid for a contractor.