Inland Revenue Company inspection help please

Debt_Free_Chick

laughing_cow wrote:

Yes, you're right, I probably picked a bad example there. I should perhaps have shown examples of companies who provide us with a service rather than a product, such as temp agencies, designers, models etc.

Thanks for the IR information - very useful. Reading that, it seems that the cleaner should be classed as an employee. However, most of the criteria also apply to our freelancers so it doesn't make a lot of sense to me why the IR are happy that they are self-employed. Still, I'm not going to bring that up - I don't really want to encourage them to insist that the freelancers become employees!

You need to look at the terms & conditions you have agreed with your freelancers. Are they really freelance ... free to choose when to do work for you and when not to? Do they do work for other employers? If they are working exclusively for you, at your premises, on your terms, then the IR are likely to view them as employees. And from a "common sense" point of view, they probably are. You can call yourself "freelance" but unless you are truly "freelance" i.e. working under your own terms, for whomever you choose, then you are probably employed. Look into this carefully.

The whole thing has surprised me I suppose because I have never heard of anyone having a cleaner on the payroll. As far as 'rights' go, what are the implications of putting a cleaner on the payroll? Could a cleaner eg take maternity leave? If this is the case then we have no option but to use a cleaning company or do it ourselves as we are a small business and paying benefits to such a 'minor' member of staff would be a struggle.

Thanks for all the responses - given me plenty to think about!

A cleaner who is an employee is treated exactly the same as all other employees - Maternity Pay, SSP, employment rights, redundancy rights ...etc. Furthermore, she is probably entitled to pro-rata benefits. If you provide benefits for other (comparable) employees, then she is entitled to a pro-rata benefit. Unless you can provide "justification" for not doing so.

Do you not have an HR person or lawyer who advises on employment issues?

geo555

I had a similar problem with the Inland Revenue a couple of years back. We used to pay £25 a month for someone to do a bit of sweeping up at a property we owed and £40 a month for someone to clean the toilets.
The people concerned didn't want top give their NI details, for fear of being lumbered with the tax. The upshot was that we ended up paying £500 to cover NI contributions, just to get the revenue off our back.
The trouble is, that they look in a book and what the book says is what goes. These people have no idea of running a business and the little bit of give and take that you must have to overcome these problems. Its how the economy works.
Now, I expect that you will have to employ a contract cleaner for far more than what you were paying. Have the inconvienece of not knowing if the cleaner can be trusted or is capable of doing the job properly.

Did the revenue contact your accountants to say that they were going to do an inspection? I think that they should of informed them of any inquirey and allow them to be there to answer questions.
The Revenue have been praying on so many companys, looking for any minor discriminations, that they have expanded the "compliance units". Many companys just pay up to avoid the hassle of a thorough investigation.
I did hear of one amusing story. A revenue inspector turned up at a company, parked in their car park and went about pestering the company. This company has "Unautherised Vehicles will be clamped" signs in their carpark, so the tax inspectors car was duly clamped. They then had to get a train back to the tax office to get the fund for release of the car. I don't usually approve of clamping, but in this case, justice seemed to be done.

geo555

I had a similar problem with the Inland Revenue a couple of years back. We used to pay £25 a month for someone to do a bit of sweeping up at a property we owed and £40 a month for someone to clean the toilets.
The people concerned didn't want top give their NI details, for fear of being lumbered with the tax. The upshot was that we ended up paying £500 to cover NI contributions, just to get the revenue off our back.
The trouble is, that they look in a book and what the book says is what goes. These people have no idea of running a business and the little bit of give and take that you must have to overcome these problems. Its how the economy works.
Now, I expect that you will have to employ a contract cleaner for far more than what you were paying. Have the inconvienece of not knowing if the cleaner can be trusted or is capable of doing the job properly.

Did the revenue contact your accountants to say that they were going to do an inspection? I think that they should of informed them of any inquirey and allow them to be there to answer questions.
The Revenue have been praying on so many companys, looking for any minor discriminations, that they have expanded the "compliance units". Many companys just pay up to avoid the hassle of a thorough investigation.
I did hear of one amusing story. A revenue inspector turned up at a company, parked in their car park and went about pestering the company. This company has "Unautherised Vehicles will be clamped" signs in their carpark, so the tax inspectors car was duly clamped. They then had to get a train back to the tax office to get the fund for release of the car. I don't usually approve of clamping, but in this case, justice seemed to be done.

Noozan

geo555 wrote:

I did hear of one amusing story. A revenue inspector turned up at a company, parked in their car park and went about pestering the company. This company has "Unautherised Vehicles will be clamped" signs in their carpark, so the tax inspectors car was duly clamped. They then had to get a train back to the tax office to get the fund for release of the car. I don't usually approve of clamping, but in this case, justice seemed to be done.

:rotfl: :T