Employed or self employed

Employed or self employed

Didn't find your answer?

Our client company sells carpets. As part of the service, the company provides fitters. The company would like the customers to pay the fitters directly, but quite often the customers prefer to pay the company by credit card . Our client insists that the fitters carry their own insurance. Our client does not profit from the fitting costs.

Are the fitters employees, or should our client deduct tax under CIS or are they self employed?

Carpet Fitter

Replies (2)

Please login or register to join the discussion.

Euan's picture
By Euan MacLennan
23rd Oct 2007 14:23

Probably self-employed
One thing the fitters are not is CIS sub-contractors - it says at para. A.31 of CIS340 that under SP12/81, carpet fitting is excluded from CIS.

Given that some customers pay the fitters directly, it seems that the carpet company is only acting as an agent to collect the fitting fee for the fitters. Assuming that the company does not directly employ any other fitters of its own, it seems that the external fitters can be treated as self-employed, because they accept the financial risk of doing the job for a specified fee.

What does the company do about VAT? Presumably, it is registered and charges VAT on its sale of the carpets. Does it then charge VAT on the ancillary service of fitting, regardless of whether the fitter is VAT registered? If so, it does not preclude treating the fitters as self-employed, but the case would be much stronger if it did not collect VAT for unregistered fitters.

Thanks (0)
avatar
By AnonymousUser
24th Oct 2007 08:14

Carpet
I would suggest you see what the Status Tool on the Revenue website gives as an answer. This is primarily for CIS issues BUT I have used it successfully to establish self employment for a client who is not involved
at all with the Building Industry. In the case in question the Revenue challenged our client's status but on advising them of the answer the Status Checker gave they accepted our view without further arguement.

Thanks (0)