Going through the paper over the weekend I noticed a small article about how the poor (highly paid) TV presenters were being hounded by that monster called HMRC just because they have found a way to pay less tax by becoming a company and charging their “employer” as a consultant from their one person, one employee company.
I don’t know about you but this sounds very much like the witch hunt the Inland Revenue waged against everybody else (and especially heating engineers and those in CIS) a few years ago.
At that time the rule (they reminded everyone about) was that if you were self employed but worked primarily for one company they (the HMRC) considered you an employee and treated you as such. As a result the number of sub-contractors dropped to an all time low, a large percentage of them (and their contractors) were told to pay up to 7 years of back taxes and fines and many companies were forced to employ the previous sub-contractors and found their overheads rise so much that many were unable to continue and folded.
And of the more recent purge of Gas Safe registered engineers not filing any returns.
I am not surprised that this practice has returned, I am just amazed that it has taken so long for the tax man to catch up.
However, even though I think the current purge is right, it might be wise to have a look at your current Sub-contractors and check that they do not fall foul of this rule as with all HMRC practices, once they start getting a return on their efforts they always spread their ‘nets’ wider.
If you have any thoughts or comments on this view then why not share them on our Facebook page? I won’t take offence and it would be interesting to see how others feel:
One of the GasBoilerParts Team.