Self employed (sort of) tax

[chumpion]

I started work for an agency (care work) in Sep and was paid through bacs. In Nov the agency gave us Self employed status and contracted out wages paid to another company.

As it is agency work it is very intermittent so I can work fifty hrs one week and then zero for the next three weeks. Before I was SE I earned less than £1000 and from then until April I have earned £1743.86 and they have kept £314. As I am well under my tax allowance of £6000 when will I be refunded?

I have contacted the company by tel and was told to email but one week later still no reply. I know it isn't a lot of money but comparable to my earnings it is.

Thanks for any replies

If they are paying you on a SE basis then they cannot refund overpaid tax. You usually have to fill out a self-assessment at the end of the tax year for HMRc and they will work out your tax posision then. If you have not been sent a form you need to contact HMRC for one.

why have they kept £314? if you are self-employed then tax (and NI) is your responsibility and they shouldn't be taking anything off your pay.

They haven't paid that in tax they have held it back so that I can pay my tax bill when I get it.

imho they're taking the piss. they are holding it back so that they can earn interest on it - not to help you. it's your money and, if you're self-employed, your tax has nothing to do with them. you're a grown up (I assume!) and perfectly capable of saving up for your tax bill. Unless you signed up for/specifically asked them to hold the money back they have no right to do this. (nb - I am taking as someone with a vague knowledge of tax and being s-e -NOT an expert)

and you say it's not a lot of money - but if they;'re holding similar amounts back from a whole load of other people it's a nice little earner for them.

I would advise you to contact HMRC as to your 'employment' status as, according to their rules you do not initially appear to be 'self-employed'
the questions to ask yourself are;
if the agency contact me for a job and I agree to do it, do I have to do it myself or can I send someone else in my place
do I send an invoice for the work I do to some one and they then pay this or do they automatically pay me an hourly rate
If they say you are self employed they are not entitled to deduct anything from your wages - 'to save to pay your tax' -
It would appear that the agency are acting incorrectly within the tax laws

@mollymole
I have to do it myself
I get paid an hourly rate

I thought it sounded dodgy when they initially changed my contract and that it was just a way of avoiding paying hol pay, maternity pay etc

There are specific regulations that apply to agency work, and it does sound as though they have altered your contract so that they can now say you are not an employee.

I second a call to HMRC, you need to speak to someone on their Status helpline.

I have spoke to HMRC and they also thought it sounded dubious. I have spoken to the company who are contracted to pay my wages. They have told me it is company policy to hold the money which equates to 18%. 13% to pay my tax and 5% which is their charge for paying me. WTF obviously I didn't notice this in the terms and conditions they sent me. Is this normal that they charge me this?

both the agency and the pay roll company are taking the piss, but they may have been clever about it

firstly I would get advice as to the switch to s-e. I strongly suspect that they have, in effect, made you redundant - in which case you should have got whatever statutory redundancy entitlements you are due, plus any furtehr entitlements that were in your contract of employment. it's possible they waved something in your face, asked you to sign it and in doing so tried to get you to sign rights away. however, my understanding is that it's not that easy - there are sometimes some rights you can;t sign away.

having made you redundant they are them using you as a s-e contractor. as such you can agree with them a rate of pay and invoice them accordingly. if they then chose to use someone else to process your invoice and transfer money to your account that's their business - and their expense. and they (agency or pay-roll company) certainly can;t with-hold a cut of your earnings.

However, having said all that, the difficulty is if you point all this out to them, they will say, well in that case we're only prepared to pay you xx per hour (ie the net result will be the same) and or they'll say well we won;t give you any work. SO I would strongly recommend a lot of googling and research about this - then CAB or similar advice and then - get together with other staff. together you'll have some muscle. on your own it'll be hard to get a change.

You can ask HMRC to issue an opinion on whether you are self employed or not. You can then take this to the engager, in this case the agency. You do need to speak to a status specialist though, not just the normal helpline.