SELF-EMPLOYED

Companies with self-employed workers

If your company engages individuals on a self-employed basis, there is a good chance HMRC will question how and why they are self-employed if they open an enquiry into the business.

Trinity Tax can provide as much or as little assistance as you wish.

The law on employment status is far from clear and the chances of getting through a challenge without a solid understanding of the area, supported by case law are pretty slim. For every argument you can put forward as to why they are self-employed, HMRC will be able to produce a counter-argument and it can be quick and easy to go from believing you are in a good position, to crying into a pillow wondering what happened and how you have ended up with a massive HMRC debt.

Need some tax advice? Give us call!

It is easy to under-estimate how much money HMRC would seek to recover but such an exercise will quickly show how important it is, even just to review the position and ensure you have a reasonable chance of success.

  • If a company had 10 people working for them at £600 per week, the employers NI alone would add up to nearly £600 per week.
  • That adds up to around £30k per year so for 6 years it would be £180k
  • This is for employer’s national insurance alone and HMRC would also seek penalties (typically of around 30%) and interest which can add up to a huge amount. It would be easy to end up being £250k in debt for those 10 subcontractors.
  • If this seems unlikely for any reason, the case of JL Windows v HMRC concerned the employment status of up to 20 subcontractors and their liability was £500k.

New case law pops up all the time and so even keeping on top of developments can be time-consuming. For example, there have been 6 IR35 cases in the media sector in 2019 alone and one of the judgments was 150 pages long.

If you are confident the individuals are self-employed why not test the water with us rather than HMRC. You can put your best arguments forward and we can tell you the kind of responses you can expect back from HMRC and see whether you remain confident after.

The services we provide can vary but can include: