Not sure about my situation

[lordnewtown]

Sorry if this is long but I'll give you the details. I've always worked in jobs where my employers have deducted tax and NI from my wages, as seen on the payslips.

For the last few months, I've been doing a sales job. When I received payment by cheque, I assumed that the tax and NI wa sbeing deducted by my employers, that they knew what they were doing. However, when I aksed them a while ago about the tax situation, they told me I need to register as self-employed. They seem quite cagey about being specific with their advice.

But because I do another job where my tax and NI IS already deducted, they told me that I don't need to pay it twice.

My friend's father who is an accountant told me that I shouldn't register as self-employed, even though by the Inland Revenue's website definition, I am. He said that he thinks my employers are upto something if they're encouraging me to do so. The overall director said that agents who work for her directly ARE classed as self-employed but hardly pay tax on their earnings.

I really need to know; firstly am I actually self-employed and do I need to register as such? Secondly, does my other job have a bearing on the situation? Thirdly, if it turns out I'm in the wrong, how can I rectify it so I don't get in trouble? Finally, how can I ensure that I don't end up with a huge tax bill?

Thanks

[Bob Jones]

In this set of circumstances whether you are employed or self employed depends on whether there is a master/servant relationship between yourself and the person for whom you have been working. There was a famous case (All England Law Report - Ready Mix Concrete) years ago where the arbiter said that deciding these cases was a matter of weighing up the fors and againsts and deciding on which side the balance falls. One of the main contributory factors of self employment is financial risk . From the limited information provided it seems that you do not have a financial risk and the fact that the person for whom you work is "cagey" suggeests that you are an employee. My advice would be to approach your local tax enquiry centre with as much of the facts as you can gather together. You need to speak to the status officer on employer compliance. I would not bother seeking professional help - go straight to HMRC ...

Bob Jones
HMIT (retired)

bob@internet-taxation.co.uk