Can a person be denied going self employed?

keaton

I just read a odd article and wondered can hmrc, or anyone else be deny someone going self employed(aside from a bankrupt person)?

CLAPTON

keaton wrote: »

I just read a odd article and wondered can hmrc, or anyone else be deny someone going self employed(aside from a bankrupt person)?

a bankrupt can be a self employed window cleaner or any of another million types of activities

molerat

HMRC can deny that you are self employed in some circumstances but they cannot prevent you from becoming genuinely self employed.

WHA

HMRC can decide that the work you do isn't self employment and charge tax/NIC as if you were an employee, but that doesn't stop you working as self employed - it's just that they charge tax/nic differently on your earnings.

ChiefGrasscutter

I think they can also deny you if the "objective" of you being "self employed" is merely to achieve tax losses by claiming expenditures as tax deductible within the self employment which would otherwise be classed as just normal personal expenditure outside of business which could not be deducted form anything.
(Annual subs to professional and other regulatory bodies comes to mind)

teddysmum

ChiefGrasscutter wrote: »

I think they can also deny you if the "objective" of you being "self employed" is merely to achieve tax losses by claiming expenditures as tax deductible within the self employment which would otherwise be classed as just normal personal expenditure outside of business which could not be deducted form anything.
(Annual subs to professional and other regulatory bodies comes to mind)

I seem to remember a conversation in which it was mentioned that, if a business fails to make a profit, after a reasonable time, it is denied business status.

keaton

teddysmum wrote: »

I seem to remember a conversation in which it was mentioned that, if a business fails to make a profit, after a reasonable time, it is denied business status.

So the self employed person would be forced to become a paye employee?

CLAPTON

keaton wrote: »

So the self employed person would be forced to become a paye employee?

obviously not

I think (but am unsure) , that there a suggestion that the full range of benefits which SE usually opens, will not apply for SE with very low earning (which can be seen as scams simply to claim benefits)

booksurr

keaton wrote: »

So the self employed person would be forced to become a paye employee?

teddymun's comment is a sweeping generalisation and you should not take it literally as it is contextless

since you have not given any context for your initial comment about what you read it is impossible to comment on whether what you read was right or not. There are loads of circumstances where HMRC would challenge self employed status, but that would be related to your tax status of "self" employed as opposed to being an employee (or not working)

Example 1: it, could be applied to the scenario where HMRC were investigating someone who had previously undertaken a "hobby" and had subsequently claimed it was a "business" and had carried on said "business" for several years claiming losses each year. HMRC would quite rightly challenge that it failed one or more of the "10 badges of trade" (google that phrase as it is very important to understanding tax) as there was no obvious business like behavior, such as intention to make a profit.

Therefore, the business (ie self employed status) would be "denied" as the taxpayer was simply manipulating the system in order to claim tax relief on expenses associated with their hobby not a real business. In reality HMRC are not "denying" self employment, they are saying that the business does not exist at all, whether the person tries to claim they are an "employee" of it or its "self employed" owner. They are neither, there is no business , its simply their hobby

Example 2: "false" self employment under IR 35 (google it, it's rather complex and HMRC have little appetite for challenging it of late)

misspickle_2

Nobody can prevent you being self employed.
Why would they?