New payment scheme for family therapists forcing them onto PAYE
A fried has posed the following dilemma. I don't know the answer but thought that AccountingWeb readers may be able to help.
Both my children are taught at home as they are autistic. We are given funding by our local London borough and pay teachers/therapists to educate the children. The money is paid quarterly: I submit a signed statement from each of the therapists as to how much they received and I’m reimbursed for the lump sum up to an agreed amount (unfortunately insufficient – but that’s another story!). All the therapists are self-employed and fulfil that criteria as far as I’m aware (in that they don’t get paid holiday or sick leave; work for other families besides our own; hours per week vary from therapist to therapist and week to week but ranges from 9 hours to 16 hours; they provide their own work equipment; they have to pay for their own training). Although I’m not responsible for the therapists tax returns, none have had any problems about being accepted as self-employed by the IR.
We have just been informed that the way we receive our payments is going to be changed: the money will still come from the borough but in the form of a ‘personal budget’. We have been told that under this new payment scheme all therapists employed by ourselves must be employees, and therefore subject to PAYE. The My contact at the London borough say they have discussed the matter with HMRC and that was their conclusion: no argument! Everything else remains the same, we still have to find the therapists, negotiate pay etc.
Leaving aside the additional cost of this, I’m concerned from the therapist viewpoint that if their work for us is constituted as PAYE, then the IR can argue that if they work for anyone else on the same basis, that should also be PAYE.
My question is: do you think it’s worth trying to argue that because the circumstances of their work hasn’t altered one iota, they should still be entitled to remain self-employed (in other words where the money comes from is irrelevant – what is relevant is the terms of their service)? Or does the London Boriugh have us over a barrel as ultimately they are paying the money to us: and if they decide that anybody who works for us with their money is PAYE, then so be it?
- Where to follow court cases/rulings 45 1
- New (non resident) client not filed in 20 years 334 5
- Auto Enrolment 49 1
- Car purchase Lease or Buy 292 8
- Large director's pension contribution 365 2
- Legal structure of a group of friends producing a free newspaper 564 13
- Childcare voucher scheme for a director earning the minimum amount 151 8
- will this work for IHT 298 3
- Annual Return for company for whom director/shareholder has died 185 3
- Gifting Shares to a Limited Company 186 2
- Online or Paper 64-8? 380 7
- Notes on related parties 110 4
- Tax on internet ad sharing income 288 2
- Auto Enrolment - Help each other by sharing known problems 612 6
- Anyone having problems with Taxfiler 586 20
- I am 34 years old, am I too old to start a career in Accounting ? which is the best way to pursue it 431 8
- Divorcing husband, both 50% owners of a Ltd business 460 9
- Tax Planning for Family and Owner-Managed Companies 2015/16 593 9
- iris update 11.9.2 402 6
- Sports Sponsorship 257 2
- Self employed and HMRC Worldwide Subsistence Rates 774
- Interest paid - do new rules affect Tax Credits? 460
- Market Invoice (P2P invoice discounting) tax treatment 277
- DTA tie-breaker issue 268
- CGT for NOn UK residents 228
- Apprenticeship Levy 204
- What are the tax implications of overseas sales through a UK based company? 198
- Capital Gains personal representatives 185
- Just checking re PSA 181
- Mandating Rental income or dividend income to a company 173