Oh dear, any advice on employers tax liability?

[DoubleLifeIsALifeOfSorts]

Am disabled and have employed several carers in recent years. And one situation is coming back to bite me on the arse.

Employed my first ever carer last year mar-July approx, I wanted to set it up through a payroll company but they kept getting it wrong and making a massive amount of mistakes and basically I was too ill to deal with it SO I talked to the worker who said 'no problem I'll be self employed and get my husbands accountant to deal with it at the end of the year. Ok says I, is there anything I need to do? Oh no says she I'll do it all via the accountant...

So last I hear until I get a letter from her accountant demanding (rudely) a P45 for Ms employment period. And in the same post get a letter from HMRC to tell me I owe them £1500 employment tax which needs settling ASAP.

So, what to do? I know now what I should have done... Which is insist on seeing M's self employment codes and rewriting the original employment constract to change it to a self employment one.

But what now? Can I throw it back at their accountant and say there is no P45 as M was self employed for this period?

Or give it up as a bad loss and if so... Ignore the accountant, and deal with HMRC. Will I be able to pay it in installments? Say over 6 months? As I can do that ok, but don't have all the money up front.

Also my current carer has just asked to go self employed from sept salary, but I haven't chased her paperwork - what do I need her to set up and by when so the same doesn't happen again?

(argh)... Thanks so much

[Sephy]

Hiua,

Not a lot of advice except to say that it's not a matter of your and your carer's choice whether they are self employed or an employee - its about the working relationship. So if e.g. They are contracted to get the job done and can send someone else in their place if ill etc, then more likely to be self employed, if they have fixed hours and sick or holiday pay then more likely to be an employee.

Look at the hmrc website for more details and a tool that tells you which you are.

www.hmrc.gov.uk/working/intro/empstatus.htm

Even if you and the cater stick to your agreement that s/he was SE, if HMRC disagree with the status they can still ask you for what is owed from you as an employer.

[Cindy34]

Current carer can't be self employed if they are doing regular work, rather than ad-hoc. Employment status is a matter of fact, not of choice. So don't go down that route.

Not sure about the previous carer, I would wonder how HMRC have your details, know what you have paid and thus been able to calculate employers NI.

Hope someone can offer you advice on this. Is there a carers association which gives advice?

[Oblomov]

Why didn't the payroll company provide a P45?
Have HMRC sent a calculation of how the £1500 was worked out?

[FunkyBoldRibena]

Unless there was an agreement to say they were self employed and they invoiced each month, then you probably owe the money to HMRC.

Were they actually paid through the payroll company?

[DoubleLifeIsALifeOfSorts]

No the payroll company messed it up for months and months so nothing ever ended up happening except sending me a huge bill for their 'services'. When i informed them she was going self emplpyee they told me i dodnt have to pay ni & tax. A person who is self employee doesnt get a P45, so how am i supposed to acquire pne for her now as she didnt receive one at the time?
I didn't know enough of employment law to know that it wasn't ok for the employee to tell me they were going to go self employed at that point - obviously I know that now and I'm asking what you'd do to correct the situation?

One of my carers now is a registered self employed person and that's not a matter for query (she's an actress and has various sources of income which she manages well), and the other person wants to join them in their style of work, hence the change (variable hours, no holiday pay etc). This works for the nature of the job. She visited the CAB and got advised that she should be self employed.

So although I hear your concerns, can you move on to telling me:

1. What to do to rectify the letter from the accountant? Ie can I tell him that as she didn't work for me as an employee (at her request), they can't expect a p45 as I have no way of issuing one now so far down the line
2. Whether to pay HMRC (but without a p45), that seems a yes but do you know whether they're flexible to pay it in installments? and are they going to ask for a p45 as well or just the money
3. And what to ask of the newer employee in terms of paperwork for her becoming self employed, so this doesn't happen again?!

I don't like being in trouble and want to resolve it and close it down so it doesn't carry on.

[DoubleLifeIsALifeOfSorts]

And no, no advice and it was all just thrown at me when I was unconscious 18-22 hrs a day, and even just trying to advertise and interview deteriorated my condition substantially. So the payroll stuff was the nail in the coffin as far as my ability to organise or manage anything was concerned. It was fucking horrible time and I never want to go back there, and want to sort this out without being dragged under again.

[TheDoctrineOfWho]

I don't know enough to advise you but HMRC are usually pretty good about instalments.

[prh47bridge]

Until she became self employed you were the employer, not the payroll company. The fact that a P45 is being requested rather than some other paperwork suggests the accountant wants a P45 for the period when the carer was employed by you, i.e. the period when the payroll company should have been paying her. Similarly I presume the £1500 HMRC want covers employer's NI for that period.

[DoubleLifeIsALifeOfSorts]

Ok so in the panic last night I got it wrong!

The HMRC bill has nothing to do with the first employee M, it was a query why I'd stopped paying it for the latest employee who had just gone self employed. She's already sent off paperwork about that so that should be fine.

So now I'm worried about just the accountants letter (which is even more worrying now)...

They are demanding a P45, but she never worked on the payroll and the agreement always was that she's sort it out with her husbands account. I obviously have done the worst thing ever as I didn't create a paper trail of her wanting to go self employed and me agreeing. What the f*ck do I do now???

[nannynick]

I feel the payroll company should sort it out.
Sounds like the HMRC payment is for period that they were your employee.

[prh47bridge]

You can only produce a P45 if she was employed by you. If she was always self employed simply write back to the accountant stating that you were never her employer and hence cannot provide a P45.

[Oblomov]

I just don't get this.
She was employed by the OP. For a period. Op was paying her through the payroll company.
So the payroll company should know the exact dates that she was employed by the OP. They should have produced a P60 and a P45.

Op, write down the dates that she was employed by you.
Ring the Payroll company and get them to agree these dates.
Ask for copies of P60 and P45 , telling them, that these documents have never been received.

Then write a letter to the accountant. sending the documents.
She worked for me from feb 12 to Jun 12. then she became self employed.
END OF.

That is all you need to do.

Dealing with revenue is another thing!! Ask for a copy of their calculation. Check the dates.

If you do owe that amount, then you phone them and agree a schedule for how much you can afford to pay.
Sometimes you can get it spread over many months, sometimes 12-18 months, depending on how nice the person is, who you speak to at HMRC.


This is turning into a big issue, when it need not be.
Deal with it. One step at a time.

[prh47bridge]

According to the OP she never worked on the payroll, which suggests she was never employed by him. If the agreement was that she was self employed throughout the OP should not be providing a P45. If she was employed by the OP either he or the payroll company should produce a P45.

And he has already explained that the HMRC bill is for his latest employee who has just gone self employed.

[Oblomov]

Sorry. Misunderstood.

[DoubleLifeIsALifeOfSorts]

Well I've written a letter back to the accountant saying that there is no p45 as she was self employed. I gave details on her hourly rate and dates etc. I can only hope the account wants to just get things straight rather than avoid tax by accusing me... Fingers crossed as there's not much I can do apart from that as wasn't written down.

The reason am panicking is because A. I am extremely law abiding and being 'in trouble' freaks me out massively B. the accountant letter was aggressive and accusatory, which makes me think they ve got no intention of being honest and C. I live on a knife edge of money and functioning, this could well tip me over the edge