Self employed with one "client"

[runragged]

OK, my friend - the same one as previous post - is self employed but has only one employer. (Works for Oxford University in regular job as well on PAYE etc) He invoices this guy every month. I quizzed him a little while about his tax and NI as a self employed person and he told me that his "boss" paid it on his tax returns.

Now, I know that the construction industry works like this and I know that if you are self emplyed with only one employer things are slightly different but what has happened is that now it looks like his boss has not paid his TAX/NI (ever!)

Does any tax experts out there know if there is any reason for my friend to think his boss would pay these things? Or if, as I suspect, he has got a serious problem on his hands, any idea what he should do.

sounds like he is in the shit on tax. it is his responsibility to pay it.

if he is self employed and raises invoices, why has his employer reduced his rate by 50p? has he just been underpaying each invoice? If that is the case then ignore my advice on the previous thread (answers my question about whether he has a contract) and instead he will have a debt claim which he can pursue through the small claim courts (obviously he would write them a letter first with words to the effect of "due to your underpayment of invoices the sum of £x is due, please pay with in y days or I will have to take further action".

of course if he starts suing them they are unlikely to give him more work, but similarly he can tell them that he is unwilling to work for the lower rate. what he wants to do will depend on how secure his relationship is.

If he is self-employed then it is his responsibility to sort out his tax. As PPH suggests it sounds like a dodge on the part of the employer to pay him less, but the bad news is that if the IR check your friend out, they will demand the tax from him, not the employer. Ignorance is no excuse as far as they are concerned.

Technically, you are not allowed to be self-employed with only one employer either, but they have been turning a blind eye to that: they use it where they suspect tax dodging but can't prove it as far as I know.

Has he submitted last year's tax return yet? If not, he should probably get an accountant sharpish and if so, it might be an idea to phone the IR helpline.

Thanks you two, I suspected as much. Now hopefully I can help him get his short payment back from his regular job it can go towards his tax arrears!

On a personal note I just don't understand it. I have to know exactly how things work and where I stand in everything, how people just drift along I cannot understand!

runragged, I was self employed with only 1 client a long time ago and the advice I got from my acct at the time was that it was the company's responsibility to deduct tax and NI from me since I didn't fit the criteria for self employment. These are fairly strict (you share in the profit and loss of the co etc, see IR website for details I think) so maybe your friend doesn't fit them either. Anyway, I put it in writing to the employer (since it turned out that this is what they were) and they started deducting tax and NI from me at source, having accepted that I wasn't truly self employed by IR definitions. HTH. The construction industry is a completely different kettle of fish though so if he's in that ignore me totally!

Thanks WWW. NO he's a photographer. The construction industry is the only industry I know anything about self employment though, just wondered if anything compares.