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?
- Paint Manufacturer Flat Rate Scheme 150 4
- Accountants' Error 699 13
- ICPA taxwise fee protection 146 3
- Scoot 184 4
- Zero Rated VAT on New Building 153 2
- Tax code for Companies House fees 205 3
- G'day IPA-IFA 661 11
- Why do HMRC have a different FPS liability to the amount I sent? 1,454 20
- VAT customer is registered in France, goods shipped to the UK 110 1
- Regaining my qualification 204 2
- Self-Assessment - NIC Exemption 235 2
- Recommendations for tax advice sole practitioner 236 2
- Auto enrolment 194 3
- Shareholder agreement 174 3
- Tax treatment of cashed in American Savings Plan 197 3
- Company Reorganisation 165 3
- Employee Loan 209 2
- IRIS - Personal Tax - 2013/14 - Page UKP2 466 15
- Statutory residence test - transit days 597 5
- CGT - Is a calculation required now? 150 1
- Skandia using wrong address 1,453
- Nil Rate Band Trust - index linked debt by way of charge over property 767
- Any views 699
- HMRC Employers Diary 523
- International interest certificate 426
- Stamp Duty on share for share exchange 390
- Sale of business 356
- NOVA 261
- Advertising services? 257
- IRIS Open Books problem 250