Re: company not paying paye?

"Tim" wrote
... is HMRC in the habit of sending out
decisive letters without having them checked,
or looked at by an expert or anyone senior?

"Simon" wrote
Yes

Then that is very dangerous, and when it is
true the taxpayer ought to be given the benefit
of HMRC's negligence, shouldn't they?!

"Simon" wrote:
Status is one of those areas where many
meddle but few actually become "Experts".

"Tim" wrote
Exactly. Which is why I've been arguing that it
isn't always *obvious* to any group of people
whether the status is self-employment or not.
Peter and Alan seem to think that you can know, in
advance, what the subsequent determination will be...

"Simon" wrote:
My approach would be that if the engager had provided
HMRC with all the facts and the wrong decision had been
made based on those facts, then HMRC is stuck with that
until they issue corrective advice. If the had asked the right
questions and had received incomplete or inaccurate responses, ...

"Tim" wrote
That initially sounds fair, but leaves the unfortunate taxpayer in the
position of being assumed to be "guilty" until proven "innocent".

"Simon" wrote
Ever heard of the Pearlberg principle, thanks Lord denning

No - tell us more!

"Tim" wrote
Do you think that the clause in the contract (requiring the "employee"
to re-imburse the "employer" for any additional taxation), which
has been agreed by the potential "employee", cannot be enforced?

"Simon" wrote
As I have said, you can't contract away a lawful responsibility.

No-one is suggesting that you can. We agree that the "employer"
would still be responsible for paying HMRC, but are *adding*
that the "employee" is responsible (by contract between "employer"
& "employee") to re-imburse the "employer" afterwards.

See the difference?

It's a bit like a (VAT-registered) shopkeeper & customer -- it is the
shopkeeper who has the responsibility to pay over the VAT on goods
sold to HMRC. However, the sale contract between the two parties
allows the customer to pay the VAT amount to the shopkeeper....

If you were right, then next time I buy a TV at Dixons I would
have a good case to pay only the VAT-exclusive price, because
it is Dixon's responsibility to pay the VAT to HMRC and (as
you say) "you can't contract away a lawful responsibility"!

"Simon" wrote
PAYE does not state the right to recover
the amount from the employee, ...

Agreed, but we are considering a case
where the *contract*, *does* state that right.

"Simon" wrote
... just imposes the lawful requirement to
make the deduction at the time of payment.

This is the other bit we're having trouble with.
If the potential "employer" has discussed, in good faith, *all* the
details, at length, with both their legal advisors and the IR/HMRC --
and everyone believes the relationship to be of "self-employment"
.... going as far as getting a written opinion from IR/HMRC to
that effect -- then what should the potential "employer" do?
Deduct PAYE at time of payment or not?

After all, you have indicated that HMRC may have just sent
the written opinion without having it checked or passed by
an expert, and so will expect to be able to have it overturned
later if they look at it again and find some small point on
which they can class the relationship as "employment"...

"Simon" wrote
NI on the other hand is quite explicit, there is no requirement
to deduct it in the first place, just to pay over a sum calculated
upon the earnings. However, it does state that this cannot be
recovered from the employee after the end of the tax year.

We probably agree that this certainly
relates to **recovery through PAYE**.
But I can't see this applying to the potential "employer's"
remedy of suing on the contract through the courts, though.

Fair enough if the contract didn't give the potential
"employer" this right, then the PAYE regs wouldn't
allow recovery and he'd be scuppered. But it surely
can't remove their right to sue on the contract?

"Tim" wrote
If so, do you have a basis for this?

"Simon" wrote
Not of hand, ...

I'd appreciate it, if you could look it up later!

"Simon" wrote
... I am on leave until next Tuesday. Whoo hoo!

Some of us (eg self-employed people!)
don't get any "leave". Boo hoo! :-(



.

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