Taxation
The issue
The issues here would appear to be whether there is
anything either in the contract, or in the actual relationship between
Individual and Client, in relation to this factor which
·
helps towards a decision on whether
that relationship, had it been direct and without a company in between, would
have been an employment contract - a contract of service - or a contract for
services, or
·
would be inherently inconsistent
with a contract of employment.
Legal issues, and the Revenue Guidelines
The Revenue's guidelines are silent on the point, and
probably regard this as reflected within the areas covered by 'Intention of the
Parties'.
Independent businesses are required to manage their own
tax affairs.
Employers deduct tax and NI by PAYE from salaries paid to
employees, although employees may still have to make tax returns under
self-assessment.
Comment
what would the position be likely to be in relation to
this factor for a hypothetical employee? Logic and experience suggests that in
the case of a hypothetical employee, the contract itself would probably be
silent on the point, it being taken as read that the employer make payments
under PAYE as required by law.
what would the position be likely to be in relation to
this factor for a hypothetical obviously self-employed person or consultancy (eg
Andersens, or by PWC, or EDI?). Logic and experience suggests that in the case
of a hypothetical obviously self-employed person or consultancy, the contract
would either contain an express term to the effect that the Individual would
deal with his / her own tax affairs, or would be silent on the issue (but
nevertheless expect such a term to be implicit).
do the facts here actually provide a helpful pointer
towards either view?
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