Contractor PAYE
Discussion
I am always careful to ensure that HMRC won't see the two guys to whom I sub-contract work are not seen as employees and I am pretty sure I am safe. They have 3 jobs, all very different, the other two are PAYE but I have followed the HMRC tick list defining 'employee' and feel I am on very solid ground. I have copies of emails of them declining work, they supply their own equipment, they can swap work between them, they manage their own time, train in their own time etc.
But the one ugy tells me hasn't done a SA tax return for 3 years, basically because HMRC have told him he doesn't need to. Three years ago someone else he works for in another capacioty had a HMRC investigation and forced them to take all the guys onto PAYE. I think their advice that he doesn't need to do a SA is based on the notion that he is now PAYE with all 3 of his jobs althogh he assures me they had all the details.
I have emailed him a list of cheque for 2009/10 making it clear it is for his SA but he is sitting tight on the basis that he has the name and date on which he was told by HMRC after the investigation he didn't need to do a SA and has calculated that the tax payable is minimal as he has loads of expenses to off-set. I have told him he still needs to detail that in a SA but he seem resolute.
Short of grassing him up, how can I be sure that HMRC don't see me as his employrer and come after me for his PAYE?
As you know, it's his responsibility to do a SA if he needs to regardless of what HMRC have told him. So he is certainly on shaky ground.
Regardless of whether you grass him up or not, do you want someone who is willing to ignore advice and deliberately try to hide something from an authority to continue to work for you?
Regardless of whether you grass him up or not, do you want someone who is willing to ignore advice and deliberately try to hide something from an authority to continue to work for you?
groomi said:
As you know, it's his responsibility to do a SA if he needs to regardless of what HMRC have told him. So he is certainly on shaky ground.
Regardless of whether you grass him up or not, do you want someone who is willing to ignore advice and deliberately try to hide something from an authority to continue to work for you?
He does a good job for me but spent 30 years in the public sector where everything was taken care of. I think we have a bit of an ostriche effect. I think he thinks that his arse is protected because he has the name and time/date of the person who sid he didn't need to do an SA. I suspect HMRC will say that that advice was not based on the full facts and arose from the other case where he used the fact he did work for us to help the other company under investiogation who were being chased to put their 'self employed' staff on the books as employees.Regardless of whether you grass him up or not, do you want someone who is willing to ignore advice and deliberately try to hide something from an authority to continue to work for you?
Eric Mc said:
Unfortunatley, if his status as self-employed is queried and reversed, it is YOU, as the defaulting employer, who has to find all the underpaid PAYE and NI.
It can work out EXTREMELY costly and I know directly of one business that went under because of this.
I am confident he is truely self employed (I went through the HMRC list of factors and he complies with most of them).It can work out EXTREMELY costly and I know directly of one business that went under because of this.
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