How do you employers stay on the right side of the tax man?

[Hodge]

Chewed this thread over deeper than I normally would any other thread last night

 

Spoke to my subby lad today who is on 3 - 4 days a week and asked how his tax return was doing. He's crap with money and a bit simple but told me hes going to declare bankrucy soon so won't need to pay it.

Told him he'll have work again when he brings me a copy of his completed paid tax return.

I don't think tax dogging is cool,

 

On 3-4 days in the eyes of the tax lot he should be employed, that's what I've been going through. My lad is the same, I asked for his UTR and he asked what's that? I reckon a lot of us are in the same boat regarding self employed workers:)

[Rupe]

Agreed, if you have someone working for you 3-4 days a week regularly then they are effectivley employed by you.

 

Self employment mean you have the freedom to work wherever you want and not be tied to any one business for set amounts of days per week. One way of proving that "could" be that they only earn a certain percentage with one company, I think 80% has been mentioned somewhere.

 

So question to rosyweb, does your "subby" earn another 20% of his total income from other places? (ideally not one other place). If all the money he earns is from you then even if that is only earned over 3-4 days a week then he is employed by you. He is not truely self employed.

 

Providing saws and PPE does not make someone self employed either. In fact some companies make employees buy there own saws/ppe. It come out of an allowance which is paid on top of the wages but forms part of the employment contract. ( I believe they get taxed less or zero on that allowance)

 

 

There seems to be big confusion over holiday pay here. Holiday pay is not paid on top of wages. You dont GIVE anybody holiday pay and you are not paying them for doing nothing. If you have someone working for you full (or part) time as an employee then they are entitled to days off. You then spread their pay over the entire year so they get a bit less each week but they still get it when on holiday. Its the fair way of doing it. Same as PAYE tax is paid from week 1 even though you dont really owe any until you have reached the tax threshold each year. After the first week of work the tax is worked out on the assumption that the person works at that rate all year, otherwise they would pay nothing for the first few months and then pay a lot for the rest. SO the HP is similar, you get paid a little less each week so that you still get some when off work.

 

So, the business owners out there who think they dont get holiday pay so why should the workers, then you are being a bit naive...... you do get holiday pay, its in every job that you do. If you go on holiday of have time off then that must be being paid for out of every job you do each throughout the year, so there is no reason why the people who work for you cant have holiday pay either all your doing is paying them for 45 weeks of the year but spreading the payment over 52, its not rocket science.

 

Of course the scary thing is keeping them in work, and I understand why so many (me inlcuded) dont employe poeple, but if knew I had the work I would employ two people straight away and leave them to it. Of course in return for that they lose the freedom to work for other poeple or do their own jobs.

[Rupe]

Chewed this thread over deeper than I normally would any other thread last night

 

Spoke to my subby lad today who is on 3 - 4 days a week and asked how his tax return was doing. He's crap with money and a bit simple but told me hes going to declare bankrucy soon so won't need to pay it.

Told him he'll have work again when he brings me a copy of his completed paid tax return.

I don't think tax dogging is cool,

 

He really is not a subby then, and you should be paying his tax. Imagine if you had just given him less each week and paid the difference to the HMRC, then he would not be having to do a tax return that he isnt capable of doing and you would keep your worker and the tax would not be dodged.

[Highland Forestry]

I have supplied my UTR number and NI number to customers I have contracted to, and they have deducted 20% tax from my invoice total, which prevents my accountant having to deal with this, also saving me on my accounts annual bill.

 

Wrong..

You need to give the CIS deductions statement to your accountant in order to make sure:

A) you dont end up paying tax on the total after the deduction through self assessment.

B) you get the total amount deducted over the year offset against your income tax bill.

C) get any rebate if entitled to it.

 

Also worth noting, you should only have deductions made from the labour element of your invoice, not from any plant or hire charges..

[TerryTibbs]

I reckon a lot of us are in the same boat regarding self employed workers:)

 

Pretty unfair, you sound like a reasonable chap, but that's not a reasonable comment, there are, and i count myself as one of them bonafide subcontractors out there, who pay tax, keep books and will happily show tax returns if needs be.

I get my income from around 4 different employers who i have varying amounts of work from, the latest being around an 8 week contract.

 

We are out there!

 

Chris

[Hodge]

Pretty unfair, you sound like a reasonable chap, but that's not a reasonable comment, there are, and i count myself as one of them bonafide subcontractors out there, who pay tax, keep books and will happily show tax returns if needs be.

I get my income from around 4 different employers who i have varying amounts of work from, the latest being around an 8 week contract.

 

We are out there!

 

Chris

 

I don't honk you understood my comment, I meant I think there are a lot of employers out there that use self employed workers but really they should be employed so therefore its reasonable to comment. I have not implied that people are not paying tax although in se cases this may be true.

[Rupe]

Paying your tax doesn't make you a bonefide sub contractor !!

It makes a good self employed worker and yes there are plenty of those out there, but a bonafide subcontractor is a seperate tree surgery company doing the work seperately from the company that got the original contract. i.e as a sub contract.

 

If you work with four other companies then your just self employed but I'm glad it's working well for you.

[TerryTibbs]

Paying your tax doesn't make you a bonefide sub contractor !!

It makes a good self employed worker and yes there are plenty of those out there, but a bonafide subcontractor is a seperate tree surgery company doing the work seperately from the company that got the original contract. i.e as a sub contract.

 

If you work with four other companies then your just self employed but I'm glad it's working well for you.

 

Suppose it depends on which one i work for, i do contracts from some of the companies...or just sub in to others, making me both? Or having the options to be both?