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Charlie Don't Surf

Father In Law 'self Employed' But Has Worked Exclusively For Same Company

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My father in law has worked for a local garage for around 20 years. Originally he was a panel beater, but now at 65 he is the tea boy / valet. The other week he scraped one of the cars whilst moving it - the boss saw no problem making him pay for the repairs. He is by far the most intelligent person working in the garage but has some how ended up in his current situation.

Anyway, to get to the point. He has been 'self employed' by this garage for the entire duration and works exclusively for them. Now, I'd imagine HMRC would have a fairly dim view of this. Would there be any advantage to my father in law of this being mentioned to them?

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Anyway, to get to the point. He has been 'self employed' by this garage for the entire duration and works exclusively for them. Now, I'd imagine HMRC would have a fairly dim view of this. Would there be any advantage to my father in law of this being mentioned to them?

Possibly, if he's paid his income tax and doesn't need the job any more.

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What do you mean exactly?

Self-employed means you derive income that is not PAYE, that's all it means.

Is he a contractor? Is he running a one man Ltd company?

Does he have a work contract?

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A few paragraphs on being self-employed that even I can understand.

"If you are self-employed, you need to register for Schedule D status at your local tax office.

The tax office will want to check that your status is genuine and you are earning your living from a variety of different sources

If more than 80% of your income comes from just one employer, it may well advise you that you are not eligible for Schedule D status and will have to pay tax on the Pay As You Earn system (Schedule E).

Once the Revenue has accepted your Schedule D status, however, you will be able to start counting a proportion of your household costs against your business activities, so if you use a study in your house for work you can start working out how much of your electricity and heating you are using when at work.

The self-employed always have to fill in a tax return as part of self-assessment - the principles of the system are the same for everyone but as a self-employed business person you may also have to fill in extra sections of the tax return.

Tax has to be paid twice a year in instalments every six months under the self-assessment system, known as "payment on account".

Payments on account have to be made for the tax year before the return for that year is due - so on 31 January in the tax year and by 31 July after the end of the tax year.

You will also be liable to pay National Insurance Contributions and these have to be deducted at regular intervals."

If he hasn't sorted out his tax status with HMRC, I'm not at all sure what the consequences would be of telling them about the situation now.

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What do you mean exactly?

Self-employed means you derive income that is not PAYE, that's all it means.

Is he a contractor? Is he running a one man Ltd company?

Does he have a work contract?

All this needs to be known. Otherwise his chat to HMRC could be a little self defeating...not to mention financially painful.

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What do you mean exactly?

Self-employed means you derive income that is not PAYE, that's all it means.

Is he a contractor? Is he running a one man Ltd company?

Does he have a work contract?

Basically he works for one garage (exclusively). They have him registered as self employed I assume for their benefit, not his. I assume he pays his tax.

I don't know what he trades as - sole trader I'd guess.

The crux of my query is given the arrangement is for the employers benefit and my father in law is 65 would there be any advantage to mentioning this to the tax office?

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Is he still employed by them?

Sounds like he almost certainly should've been paying tax through PAYE.

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My father in law has worked for a local garage for around 20 years. Originally he was a panel beater, but now at 65 he is the tea boy / valet. The other week he scraped one of the cars whilst moving it - the boss saw no problem making him pay for the repairs. He is by far the most intelligent person working in the garage but has some how ended up in his current situation.

Anyway, to get to the point. He has been 'self employed' by this garage for the entire duration and works exclusively for them. Now, I'd imagine HMRC would have a fairly dim view of this. Would there be any advantage to my father in law of this being mentioned to them?

by contacting the revenue in a petty attempt to get even with his employer you could end up costing your father-in-law thousands of pounds.

let it lie.

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Being self employed it to your farther in laws benefit, perhaps thats why they treat him like crap. One word from the garage and they could destroy his life. However some people treat people badly if they take it, a long running joke turns into something nasty when someone doesn't stand up for themselves, why has he continued to work there? Why hasn't he changed jobs?

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Has he started claiming his state pension yet?

If not, it's to be hoped that somebody has been paying NI contributions for him, otherwise he might not scrape enough qualifying years. Depends at what age he started work, I suppose.

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If the employer has on file (which they should) a signed from (can't remember the number P-something) to the effect the person is self-employed and wishes to deal with their own tax affairs through self-assessment that's where their obligation begins and ends.

It wouldn't necessarily be better on PAYE - employees would generally lose some sort of bonus if they damage a vehicle they drive. I know of one, fairly sizeable, retailer that makes employees make up any losses from accepting fake notes etc. Wouldn't have thought that was legally possible in this day and age really. Although staff do still have personal responsibilty for things like selling alcohol to minors.

Obviously, don't know exact circumstances but if I had a plumber in and they damaged something I'd expect them to make it good. Although a properly self-employed person would have professional indemnity type insurance in place for such eventualities.

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If the employer has on file (which they should) a signed from (can't remember the number P-something) to the effect the person is self-employed and wishes to deal with their own tax affairs through self-assessment that's where their obligation begins and ends.

I thought there was a rule (IR35?) which states something along the lines that if it looks like an employee and walks like an employee, treat it as an employee.

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I thought there was a rule (IR35?) which states something along the lines that if it looks like an employee and walks like an employee, treat it as an employee.

We'd obviously just prefer everyone on PAYE as it's easier to process but, we've definitely had cases where we couldn't force people on it and had to pay gross.

HMRC could probably still keeps tabs as the gross pay would I think still be recorded on a P11 ior some other sort of employer's return.

Will ask a payroll person for a definitive answer if I see one. I think most people we've had like this tend to be genuinely self-employed painters & decorators etc. earning extra income whilst still actively pursuing their traditional self-employment.

TBH - having just looked at HMRC's advice page I can't really see how anyone is legitimately wangling this, even my above example.

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He should speak to an accountant. Won't cost a lot and he will know where he stands.

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He should speak to an accountant. Won't cost a lot and he will know where he stands.

Having experienced a tax investigation - leaving and having a poo in the kettle would be a form of revenge less likely to backfire.

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He should speak to an accountant. Won't cost a lot and he will know where he stands.

Sorry but pointless' The guy is employed and should have been paying PAYE/NI for all those years. No ifs no buts-he was. Let sleeping dogs lie but this is not dead and buried when your FIL retires. The next audit by HMRC will probably bring it up and trust me they will come after your FIL after they have back charged the garage with fines and penalties for the NI portion. The tax portion is the responsibility of your father as he had the benefit-the employer just didn't collect it and pass it on. Plus your FIL should have paid his full portion of the NI.

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Having experienced a tax investigation - leaving and having a poo in the kettle would be a form of revenge less likely to backfire.

Sorry but pointless' The guy is employed and should have been paying PAYE/NI for all those years. No ifs no buts-he was. Let sleeping dogs lie but this is not dead and buried when your FIL retires. The next audit by HMRC will probably bring it up and trust me they will come after your FIL after they have back charged the garage with fines and penalties for the NI portion. The tax portion is the responsibility of your father as he had the benefit-the employer just didn't collect it and pass it on. Plus your FIL should have paid his full portion of the NI.

Right - and what exactly is to lose by going to an accountant, giving them the full details, and getting their opinion ?

We only know the basics from this thread so to assume you know what the situation is and what he should/should not do is rather naive IMO.

An accountant will know and many will have no problem being 'off the record' about it :rolleyes:

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I thought there was a rule (IR35?) which states something along the lines that if it looks like an employee and walks like an employee, treat it as an employee.

From my understanding that's in regard to your own company.

So you can be self employed, but you pay tax in the regular way. IR35 was about taking earnings as a dividend to avoid tax rather than whether you were employed by a particular company.

You statement would be more like...

"if it looks like an employee and walks like an employee, pay the same tax as an employee"

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You statement would be more like...

"if it looks like an employee and walks like an employee, pay the same tax as an employee"

Yes, I think that's sort of what I was trying to say. The FIL shouldn't be acting as a company when he's really an employee.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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