HMRC often challenge contractors about the employment status of their subcontractors. A ruling that those individuals are employees can cost a business tens of thousands of pounds.
Gilbert Tax has undertaken a number of challenges to status rulings and has often found the initial findings of the Status Inspector to be incorrect. It seems that the normal practice for HMRC is to rule that an individual is employed unless overwhelming and undisputable evidence is held to the contrary.
Often once the full facts are established it can be demonstrated that the sub contractors are genuinely self employed.
Gilbert Tax can also help you design systems and procedures that will assist your business in developing robust controls and contracts to aid in any status enquiry by the Inland Revenue.
With the advent of the rules relating to subcontractors which come into force in April 2007 it is anticipated that HMRC will put more resources into this type of tax investigation and seek to rule that more genuine self employed subcontractors are employees.
This is a very specialist area with complex legislation and case law and should always be handled by a specialist or an accountant who is conversant with all of the law.
If you have a Status Issue and would like expert Tax advice or details of how we can help please phone 0800 734 3333 or contact us.
