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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Can you advise me please.I run a small training company and

Customer Question

Can you advise me please.
I run a small training company and used to employ a number of trainers.
In 1st of August 2014 we had a down turn in work and I asked everyone to revert from PAYE employed be self employed as we couldn't afford the NI/PAYE.
My fellow director who worked in an office with the trainers (I never went to the office as it was 160 miles from my home), asked the two guys if they would be come self employed.
They both agreed as long as it didn't mean a cut in salary.
There agreement is acknowledged by them.
Apparently we didn't back this up with any documentation and we didn't ask for invoices, but the PAYE/NI contributions scheme was stopped being payed to the revenue by our accountant and the accountant was told the reason why.
The trainers where then self employed (as far as I was concerned) until the end of January when I was approached by another training organisation who offered to employ them from 5th of February 2015.This took place and now we are being approached for NI and PAYE contributions by one of them and the other is quite happy.
Are we within our rights to with hold these payments please ?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
I am of the opinion that you are. I trust that you have written evidence of their agreement to switch to self employed status.
However, you should be aware that you can run into difficulties with IR35 which, if the contractor is effectively in the position of being an employee of the company, then PAYE procedures must be observed. I am surprised that your accountant did not draw your attention to this possibility. Should HMRC become involved, presumably on complaint from the aggrieved party, I have a sneaking suspicion they they will rule that IR35 applies.
I do hope I have hepled you with your question.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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