Are benefits provided to self-employed taxable?

[section 44]

An exchange of services or goods is one thing and perfectly acceptable, however the provision of a car for private use is something different

Out of interest, if the provision of a car isn't goods or services then what is it?

[joe90]

Many thanks for all the input - it has been very helpful. We are dealing with hotel staff here who have been able to exercise control over their working hours, rates for the job etc. HOWEVER....after taking on board the advice given here, the badges of employment would indeed seem to outweigh those of self-employment so that is accepted and some correction must be considered. Now, you can probably guess my next question, what advice can you give as regards the best, i.e. least-penal, way of advising HMRC that the business now considers some staff should have been treated as employees for the past year?

Obviously there will be a catch-up cheque required for PAYE and NIC plus interest but can we avoid penalties on late submission of (a) a P35 for 2010/11? and (b) P9D's? given that they weren't required previously?

[King_Maker]

There seem to be 2 major issues here.

TAX & NI - is it just for 2010-11 or previous years?

Employment Law - as employees, they require written statements of T&Cs, National Minimum Wage, pensions, paid holidays etc.

I recommend professional advice asap.

[MrPAYE]

Firstly, well done for taking the sensible approach with this. Arguing self employed status for hotel workers would have been extremely difficult (impossible) if it came to the crunch, mostly because of the high level of control that usually exists in such establishments and the fact that most if not all workers in the sector are employed earners.

I have to agree with KingMaker, professional advice is recommended to ensure all bases are covered. Making the right disclosure to HMRC, and the approach to be used, is absolutely vital in such cases.

[joe90]

It's for 2010/11 and the current year also now. Not sure if there's a minimum wage problem - the 'employees' would not be pursuing it; would HMRC? I would hope that by volunteering the employed status, penalties might be waived?