Self assessment for dubious employment status
If an employer engages a worker under an arrangement that is 100% that of employment, but insists the worker is self employed, what does the employee need to do to ensure compliance?
I do not feel that registering as self employment is correct (as they are not self employed, despite what their employer might want), but as they know they aren't getting tax deducted at source, they therefore know they have untaxed income and thus have a liability to register under SA.
Would it be correct to therefore complete the employment pages and state no tax deducted, and give the employer's details? There is no PAYE scheme in place.
The employee wants to pay taxes due, but is more concerned with NI. They also want to keep their job.
I don't see any merit in shoe-horning this person into self employment in SA as they are just a worker, no real expenses, and indeed they are not truly self employed.
The correct answer is of course, "The employer needs to operate PAYE correctly" but this is not going to happen unless HMRC hit him with a big stick. There is no guarantee that shopping the employer will result in the use of said stick.
I am of course aware of MLR implications, I'm more concerned with the practical issues and how to protect the client.
- How quickly do you turn around y/e accounts? 2,205 17
- PAYE coding notice - deliberate misstatement 1,331 21
- CIS and Close Company 124 3
- Sage 200 and Access Dimensions reviews 301 1
- VAT Option to tax 475 17
- Brain freeze - loss on disposal of company car 179 6
- Capital allowance vehicle exchange 201 7
- S162 and Capital Allowances 133 2
- Director leaving in month 1 162 2
- Ex Gratia payments 95 1
- HMRC chasing club for unpaid fees 293 3
- Unaudited accounts and an accountant’s certificate of confirmation 179 4
- Selling assets to yourself ? 199 3
- 24 Month Rule - New Employer 194 3
- Director's remuneration accrual 180 4
- IHT - clawback of BPR 58 1
- EIS - connection through employment 98 2
- HMRC Dispensation - How long does it last for? 253 3
- Electronically supplied services - B2B 68 1
- Correct tax & VAT treatment of local overnight expenses 234 4
- Residential Property Purchase Above £750K 915
- Using Sage with Sofa Categories 643
- Free Tax Legislation? 411
- Director Loan account operation 402
- Understanding the implications of January 2015 VAT changes for downloads on threshold for VAT registration 345
- transferring simply accounting 2010 from xp to windows 7 323
- rent-a-room allowance for part of the year 229
- Paye procedures for CVA 224
- HMRC Second Income Campaign - not so much a question as heads up 191
- Pension Fixed Protection 163