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Sam
Sam, Accountant
Category: UK Tax
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One of my accounting clients has a person that has been working

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One of my accounting clients has a person that has been working with them for over a year thinking they were self employed, they have been issuing invoices and they have been paid on those invoices. However, they have now found out that that person has not registered as self employed and wants to be put on the payroll. Can the payroll be backdated, how should they inform the inland revenue? The 'contractor' has agreed to pay any tax and NI due

Hi

 

Thanks for your question

 

Can you advise whether they are in fact an employee or self employed (as per the employment status legislation)

 

What type of work do they do, what sort of business is this, where does the individual conduct the work they undertake, and are any tools/equipment used to undertake their duties, and who supplies them.

As it may be they can be self employed and therefore its not up to the employer to worry about any tax or National Insurance obligations.

BUt if they should have been an employee all along, then they should have a P46 completed with immediate effect, and include them on this years P35 and prepare a P14 with NIL tax and NI showing as deducted, and them also write into HMRC with the position and ask for the tax and National Insurance to be calculated for payment.

 

Then they can issue a revised P14, which they should submit as an amendment for the employee.

 

 

 

Thanks

 

Sam

 

Customer: replied 3 years ago.

Thanks for that prompt reply,


 


To give a little more detail, the 'contractor' is a tutor. The business owner runs an after school tuition centre and the tutor works there on set sessions decided between them, i.e. the tutor decided when they were available to teach, not sure about tools used etc. I think the tutor sets the work for the students.


 


If the tutor should have been employed what about a contract of employment which wasn't in place and things like holidays and SSP?


 


 


Regards

Hi

 

Thanks for your question

 

Then they will be an employee, as they provide they services at the schools premises so all costs are borne by the business, and work set hours according to what suits them.

 

As for the other questions, I am a UK tax expert (as we all are, under this UK tax forum, so I cannot advise on employment law matters such as holidays (although great details for non regular workers on the website https://www.gov.uk/holiday-entitlement-rights/entitlement ) and although there is no written contract, their certainly was a verbal contract in place, (but your client would need to seek more advise with an employment law specialist on this factor) But I can advise that SSP should have been considered, if the individual was sick for more than 4 consecutive days, so this is something that your client will need to revisit.

 

Thanks


Sam

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