Employer pays b&b direct, do I have to declare as earnings? I'm self employed

lijaloo

You come under the CIS scheme so if you don't provide the contractor (the employer) with the relevant reference number you will have tax deducted at a higher rate. It looks as though you may have also been "on the cards" as well some of my clients say. Keep everything you have and see an accountant at the earliest opportunity.

Prothet_of_Doom

To throw in a Spanner, research IR35.

Are you employed, or self employed ? Honestly.

Employer can pay relocation assistance tax free, if you are really an employee.

If you are self employed, you can view the B&B as a business cost, or let the "CLIENT" pay it direct. The contract can allow that.

You see what I did there?

Employer or CLIENT ?

I work freelance via my ltd company, and factor into my hourly rate, what I think it will cost to live away from home for 4 nights a week, and then my ltd company pays for the accomodation. Unlesss the Client wanted me to do a week at a sister site in another country, in which case My hourly rate is increased by agreement for that week, and I sort out my own travel and expences, at my risk.

chrismac1

With all respect to the last poster IR35 is a complete red herring here. This guy is a construction industry sub-contractor who is not operating through a personal services company. CIS has its own separate tax system because of historic problems with what was known as the "lump", foreign nationals doing a reverse "Auf Wiedersehen Pet" then disappearing, and suchlike.

Whilst status enquiries can arise in the sector, the following points are relevant:

1. The prime responsibility to assess employment status lies with the contractor, whereas with IR35 it lies with the sub-contractor. His contractor will already have completed and submitted an online status review with the first CIS return they made for him.

2. There is a simplified test of construction sector "false self-employment". i can Google the OP a link if he should need it, but on the face of his post I am willing to lay £5000 at even money that he will be deemed self-employed.

3. The complexity of such cases is nowhere near IR35, and in practice HMRC seem happy enough to be deducting the 20% up front not to want to go much further.

And going back to the original question there is further good news. Thanks to the Olympics a number of sub-contractors from places like Liverpool worked in East London for extended periods. HMRC took them to Tribunals on the basis that their B&B costs and travel from Liverpool to London were not business costs. HMRC lost. End of story.