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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I worked self employed for 5 years and haven't kept up with

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I worked self employed for 5 years and haven't kept up with my tax returns. I didn't know what I was getting myself in for. I need to get my tax affairs sorted out as I'm worried sick and can't even face opening my mail. It's really making my ill. I'm employed now at the company I worked self employed at. My income was 3000 per month, after I'd pay out for motoring expensives I was left with around 1500 per month, telephones laptops tablets were purchased, ppe. I used my home as an office but mainly spent my time on the road promoting a plant hire company. I also did some work for a van hire company which is included in the above. I have lost most of my receipts and just don't know what to do for the best, ***** ***** of my time was spent looking after my parents who are both disable so they were and still are my priority
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question, I am Sam adn I am one of the Uk tax experts here on Just Answer.
First - try not to worry, the important thing s that you want to get the position all up to date and sorted, and that's easily done.
First can you advise the following
1) Why you were not employed from the start by this company, as it may be they are in breach of the tax not you
As you were promoting their company then this is in essence sales - and you should (at first glance) been an employee to undertake this work.
What work did you do for the van hire company, did you have your own van?
2) Did you register with HMRC as self employed, if so when was the start date and have you been receiving demands for Class 2 National Insurance and have you paid any of them.
3) When did the company take you on finally as an employee, and are you having tax and National Insurance deducted from your salary eaach week.month
Thanks
Sam
Customer: replied 2 years ago.

Hi Sam thanks for the quick reply. It's a long story but I was employed by the company for around 10 years. I left and went to work for another hire company for 12 months. I came back to company on a self employed basis because the owner wanted me to do sales, the MD at the time didn't want me back as I wouldn't listen to his managment style. So I ended up self employed because of this. I was then set on as an employee in 2012 when the owner finally sacked the MD. I m employed now as director of operations. The vehicle rental company has ended up dissolved since last year. I contract hired 3 cars off them in the space of 3 years at a cost of 400 + vat per month. I paid for all the running cost ontop of this fuel tyres services. I invoiced 2000 per month to the plant company and 1000 to van hire company. I would spend between 150 to 200 per week on fuel as I travelled all over the country everyday. Covering the whole uk.

Customer: replied 2 years ago.

I never informed hmrc that I was self employed because I didn't know I had too.

The company pays me monthly and now deducts my tax and ni

I have always been paid sick pay and holiday pay from the company even when self employed. There was no doubt I should have been employed from the very start. The company has changed its name 3 times since I worked for it back in 1995. It went bankrupt and simple set up the next day in another name. I have been receiving fines for not submitting my self assessment claims for over 12 months now.

Expert:  Sam replied 2 years ago.
Hi Wayne
Thanks for your response and the additional information.
There are two ways of approaching this. (but I have offered a third as a consideration)
1) I believe (as I am sure will HMRC) that in fact you should have been an employee when your were rehired by the company - and this being the case there is a strong possibility that the company should be held responsible for both the tax and National Insurance that you owe, as its not a matter of choice whether you are employed or self employment but down to the way in which you were engaged. And in view of the fact that you could not make a profit or loss during this "self employed" period of time, and worked with building and engaging new clients for the company (rather than yourself) strengthens this position.
The other option is
2) that you accept the position of self employment, due to the fact you are still with this company and do not want to rock the boat, and this being the case you ask the company to supply you with details of all payments they made to you during this time, so you can compare this with your bank statements, and the other income, then, by default will be for the period of time you worked for the van company.
Also from your bank statements you will be able to get together the majority of the expenses you incurred, which would seem to be fuel for the travel, and the hire fees or the contract hire cars and MOT, servicing, repairs (as I am sure you paid by debit card for much of these costs.
You also will be able to establish any laptop costs internet charges, and telephone costs or mobiles, by contacting the company with whom you held these contracts - to establish the "business" costs.
I would also advise if you feel this would help, to engage the services of a local accountant, who can extract the information they need to create a set of accounts for each tax year, this will save you time, and worry, and they can also write to HMRC to advise them that you are addressing the position and will submit tax returns soon.
Option 3) Speak to the company- advise them that you have reason to believe that you probably should have been employed for that time - )this will cover most of the income and expenses, leaving you just with the van company as self employment - although I would also advise this is likely to have been employment too) and as you failed to have paid holiday, sick leave, and other employee benefits, would they assist with the tax position as you feel it would be a gesture of good well on their part. (- then you are back to consider option 1or 2! )
Let me know if you have any follow up questions on the options I have advised.
(I have just had a further post from you - if you did not register self employed with HMRC, do you know way they are expecting you to compete self assessment tax returns)
Thanks
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13693
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Customer: replied 2 years ago.

The hmrc set me a paper tax return to complete. The van hire company was linked to plant company by the shareholder.

Owner of the plant company had 50% share holding in the van hire company. I cannot rock the boat or I will loose my job my employer is pretty ruthless.

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
I understand the position you are in, so I would get all your bank statements for this period (the banks can provide duplicates up to 5-6 years) and then make an appointment with an accountant.
Phone/write to HMRC in the meantime to advise this is what you are to do, and that you plan to engage the services of an accountant once you have all the paperwork.
Also have a sit and think how much mileage you did each week/month
An accountant will be able to create almost accurate accounts (with the exception of any cash purchases you may have made) and also choose for the running costs of the vehicles, the mileage method (45p a mile for the first 10,000 miles, and 25p a mile thereafter) or the actual costs (so fuel, MOT, servicing, repairs road tax etc in which case also think how much private use you had out of each vehicle)
But please do not worry. this is easily put right, and then its just a question of how much tax and National Insurance (Class 4) you owe HMRC, and what interest is charged on late tax. But HMRC will consider a payment plan to pay them back if you require this, and the accountant can negotiate this for you too.
Let me know if you have any follow up points you wish me to expand on, but in the meantime it would be appreciated if you could accept/rate the level of service I have provided, as this ensures Just Answer credit me for my time.
Thanks
Sam

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