Q for lawyers/Accountants.

[towman]

I was working on contract for a large company last year. I sent in a bill and they paid it. Now they have decided that i should have been PAYE and have helpfully paid my NIC and tax. They have demanded the monies which they have paid on my behalf back.

1. Is this legal?
2. If i am now being treated as an employee, am I entitled to holiday pay>

thanks

[Piglet]

Sounds like one for eric...

I'd say b) yes if you're an employee you're entitled to benefits such as holiday and perhaps a payment in lieu of these is required as they've clearly changed their minds about how you should be treated.

[Eric Mc]

It was THEIR legal respnsibility to treat you correctly for PAYE purposes. THEY got it wrong, not you.

If they have had to calculate the PAYE and NI on what they paid you over the past few years or months, they have no right to approach you for the underpaid tax.

In fact, YOU can reclaim from the Revenue the Class 2 NI you inadvertantly paid whilst Self Employed.

[Smartie]

Surely they should have "grossed up" the amount they paid you to leave this as your net pay, especially as this was their error.

Maybe you might advise them that you would be happy to repay their tax/ni, but you will then be persuing a claim for unfair dismissal?

[towman]

thanks gents