Subcontracting using big boys van?? allowed??

Don’t have a word with your accountant, have a word with a lawyer. Accountants just add up figures and most of the ‘advice’ they give is frankly bollocks.

It makes no difference whatsoever how many ‘customers’ you’ve got. You can be self-employed with just one customer or you can be an employee with several employers. You could even be regarded as an employee with regards one of your ‘contracts’ and self-employed with regards another one – even with the same company.

When it comes to NI and tax payments that the ’employer’ should have made then the ’employee’ has nothing to worry about. HMRC have always taken the stance that the employer is responsible for making the deductions at source and it’s the employer that’s held liable for any underpayments – or non-payments. It used to be the case that HMRC would offset the PAYE and employee’s NI liability against the self-employed tax & NI that had already been paid by the ‘self-employed’ person but that changed last month. In theory it should now be possible for a ‘self-employed’ employee to reclaim any income tax they paid in error while their employer should have been deducting PAYE and NI from their wages. (this has now changed again, see comment below)

A clued up owner-driver working for a clueless courier company could receive their earnings entirely tax free under certain circumstances.

The more clued up courier companies avoid this happening by the use of subcontractor contracts which give the subby the responsibility of providing their own relief driver. This is an absolute defence against HMRC employment status disputes.

Alternatively they ‘employ’ these drivers through an intermediary, less clued up, courier company. Cowboy Couriers send their ‘subbies’ into ‘Big Boy Express’ on a regular basis and when the shit hits the fan (whether over employment status, drivers hours, overloading or whatever corner-cutting is forced on Cowboy Couriers by Big Boy) then Big Boy can just walk away without liability and find another mug company to provide them with drivers.

Posted under Employment

Posted by Alec at 2:08 pm, May 16, 2007

1 Comment so far

  1. Alec added on  July 12th, 2008 at 10:29

    The Income Tax (Pay as You Earn) (Amendment) Regulations 2008, came into force on 6th April 2008

    HMRC now have the discretion to transfer liability for unpaid PAYE from the employer to employee, meaning that the tax that the employer should have been deducting from the employee’s wages can be offset against any tax already paid by the employee while he was ‘self-employed’.

    HMRC have indicated that they will exercise this discretion in all but exceptional circumstances, but that employees will have a right of appeal against this treatment.

    Where the employee can’t be traced or has been made bankrupt the liability of the uncollected tax will remain with the employer.

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