The facts surrounding a working relationship will determine whether the worker is an employee or self-employed. However, the working relationship between the worker and the engager IS a matter of choice. Getting the employment status position wrong can have serious financial consequences for an engager. If HMRC reviews the engager’s or employer’s records and considers that the consultant was not genuinely self-employed but rather the terms and conditions were that of an employee, the engager or employer will be liable for the PAYE tax and national insurance contributions (NIC) considered due in respect of the payments made. HMRC can look to go back a number of years to recover the tax and NIC considered due. In addition to the tax and NIC liabilities, interest and penalties will also be due.
Employment Status: Employed or Self-employed advice for Engagers
20th August, 2018