I've been an idiot and not paid my tax - help!

Hoddie_2

Has it been clarified whether he is employed or self-employed? This should really be the first thing to consider.

kylieM_2

Yes I agree Hoodie, once this is established he will know where to go from then on, if you do want to claim travel costs, you should be working through a limited company and if your not careful you could be seen as a disguised employee here is some question to help you determine whether you are self employed:

Ask yourself the following simple questions.
If you can answer ‘Yes' to the following questions then you are probably employed and HMRC will investigate you for outstanding tax & National Insurance contributions if you are not currently paying them.
1. Do you carry out the work rather than hire someone else to do it for you?
2. Does someone else tell you what needs to be done and when to do it?
3. Are you paid by the hour, week or month and can you get overtime pay?
4. Do you work set hours, or a given number of hour a week or month?
5. Do you work at the premises of the person you work for, or where he or she decides?
If you can answer ‘Yes' to the following questions then you are probably self-employed.
6. Do you have a final say in how the business is run?
7. Do you risk your own money in the business?
8. Are you responsible for meeting the losses as well as taking the profits?
9. Do you provide the main items of equipment you need for your job, not just the small tools many employees provide for themselves?
10. Are you free to hire other people on your own terms?
11. Do you currently have to correct unsatisfactory work in your own time and at your own expense?

Bean_Counter

I concur with the above two posts. If Si could post some details of the nature of his employment, length of service with employer etc, it may well transpire that we should have been PAYE and save on the self-assessment route.

That would of course mean that the company would be liable for the unpaid tax. Is Si going to continue working for them?

amf

kylieM wrote: »

If you can answer ‘Yes' to the following questions then you are probably employed and HMRC will investigate you for outstanding tax & National Insurance contributions if you are not currently paying them.

Excellent advice IMHO:beer:. In the sentence I've quoted above I think that there might be a typo, however - as I've pointed out in my first post in this thread and, as Bean Counter also observes, it will be the employer who will be investigated as regards any tax and N.I.C. lost in the first instance, if Si is an employee. I'm assuming that's what you meant to write, kylie.

Just an aside - if SI is self employed he will have already failed to pay the flat rate, Class II N.I.C., which is due in addition to the Class IV N.I.C. (the latter is collected via the Self Assessment Return). The amount concerned, from memory, is around £9 per month so no great sum is involved.