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IR35 and a Sole Trader
stuckinarut_4
Posts: 15 Forumite
in Cutting tax
I've been self employed from around the end of 2000 up to the beginning of this year and I've now got a 'real' job'.
During my period of self employment, I working for 1 main customer, initially on a part time basis, but as the years went by, this was more or less on a full time basis. I had a desk at their offices and although initially, I provided my own laptop, a pc and laptop was provided to me about 2 and a half years ago. There was a 6 month written contract when I first started working for them, but after that, it ws a 'gentlemans agreement'. Effectively, I've been employed, but they paid me 'gross'.
My question is, who is liable for the tax on my earnings, me or the company? Should they have been paying PAYE or should I have been paying the tax on my gross earnings?
During my period of self employment, I working for 1 main customer, initially on a part time basis, but as the years went by, this was more or less on a full time basis. I had a desk at their offices and although initially, I provided my own laptop, a pc and laptop was provided to me about 2 and a half years ago. There was a 6 month written contract when I first started working for them, but after that, it ws a 'gentlemans agreement'. Effectively, I've been employed, but they paid me 'gross'.
My question is, who is liable for the tax on my earnings, me or the company? Should they have been paying PAYE or should I have been paying the tax on my gross earnings?
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Comments
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Initial reaction is you are, especially based upon the initial contract and assuming there weren't any subsequent contracts demonstrating another relationship...
As you say you know they were paying you 'gross' so you should have been paying the taxes...0 -
Were you paying your class 2 NI during that period?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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Were you paying your class 2 NI during that period?
Yes, I was.
My thinking is that I am able to put through all my expenses against income, reducing my tax bill, which doesn't seem right, considering everyone who is employed is paying PAYE.
I thought the company would be liable for PAYE?
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If you are self-employed you can put through expenses against income, however there is something like the 24 month rule....Meaning that when you are longer than 24 months at the same location that becomes your permanent place of work....There seems to be an interpretation element to it as to whether that becomes your place of work from the moment you know you'll be there for that time, or from when you are there...And what effect changing sites has etc....From experience of people I know it also depends on who the inspector is....
The thing is you were not employed! You were self employed and have a contract to show for it....As such you had to pay your tax....0
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