Contractor with employee?

Contractor with employee?

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My client carries out interim assignments trading via a Ltd Co, each perhaps 6-12 weeks with a few smaller ones on the side.  He wants his daughter to be an employee doing the admin, with the payslip showing a min of 16 hours per week so she can claim some sort of tax credit.

I questioned if he could justify 16 hours admin on a contracting business and he has come up with an elaborate job description including research in his contracting industry.  She is18/19 yrs old.

For whatever reason I didn't have an issue putting his wife through the business on a higher wage to use the PA up (higher salary, less hours) but I'm uncomfortable with what I see as benefit fraud.

I think given the client has a job description and he feels that there is 16 hours of work there, then I should process rather than question.

What are your thoughts?

Replies (6)

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James Reeves
By James Reeves
23rd Apr 2015 13:36

Some sort of tax credit?

What sort of tax credit does he think a 19 year old can claim? Does she have a child?

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By thomas
23rd Apr 2015 14:03

Yes, she does have a child. 


Yes, she does have a child.  With one of the tax credits you need so many hours of work to claim. 

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By Matrix
23rd Apr 2015 14:11

Working tax credit

It is working tax credit.  At least he is honest with you.

I would ask for him to retain proof of the hours worked and the work done and tell him that HMRC could also ask for this and they take benefit fraud very seriously.

A start may be for her to put the baby in childcare for the relevant hours since it will be hard for her to juggle the baby and this research job.

You should also ensure he has proof of the work the wife does. 

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By Anne Robinson
23rd Apr 2015 15:04

Would this business support a higher salary wife and a 16 hour per week daughter?
I imagine it is all admin as neither could do the actual contracting (OP does not actually say what type of business)

Would he pay the same to 2 strangers off the street?

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By neileg
23rd Apr 2015 15:56

Are you sure you mean what you say?

You are comfortable with the tax fraud by using up the wife's PA but uncomfortable with the benefit fraud by the daughter?

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By clairebear
24th Apr 2015 13:30

Your choice

Personally speaking, I have walked out of a role before now because I felt that what the owner was doing could potentially jeopardise my professional qualification.

Now, you have a choice.  As "Anne Robinson" said - would he be providing the same to a non-related employee? Now if the answer is no, then effectively your client has seen you wangle the wife's work and so will (rather obviously) suspect that doing the same for his daughter will not cause a problem.  Alternatively, if the answer is yes, then you can help him sort this out with a clear conscience.

The choice is yours.

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