for those that own their own business - employers tax fraud ????

[6mark901]

afternoon all,

                    hope this makes sense....... my daughter worked for a small business untill recently.She was paid minimum wage + 5% commision,Her hours were set, a place of work, equiptment and clients provided..However, when she left to go to a job with more hours her employer held back her last weeks wages as payment towards some training she did. My daughter has disputed this and been told by her ex employer that as she was self employed she has no employment rights ???? My daughter has taken advice and been told that she wasnt self employed and was in fact an employee.

                     Thing is, for my daughter to take this further would cost a darn sight more than the money owed to her , But me being me i dont want to let this lie so was wondering what her ex employer is gaining by classing her staff as self employed ? is it a tax fiddle of some kind ?

thankyou

[**towery**]

is is  ACAS that deals with this sort of thing?

i would have expected that either the cost of training was explained or written somewhere

is there anything in  her contract for that  business?

[chickengrandma-2008]

I would have thought that if she was self employed  this 'boss' person wouldn't be responsible for tax, NI, sick pay, holiday pay etc.  Didn't your daughter have a contract or something?  Who has been paying her tax and insurance?

[6mark901]

shes spoken to acas, they told her that she was an employee and not self employed and also that wages cannot be held back to cover training ......Problem is the training was agreed verbally,her boss wanted her to do it so they paid half each, she just got really snotty when my daughter said she needed more of her full time job .Her ex employer couldnt offer her more hours so she had to look elsewhere....

[divinedressesdaily]

Has your daughter been working in a salon type environment ?

its quite common for Hair and Beauty salon owners to have a clause written into employees contracts that if they are provided with specific training and then leave the employment before a set time period that the employer can recoup all or part of the training costs from the employee- did she have anything like this in her employment contract?

However from what you have said it sounds like your daughter was "employed" 

If she was self employed she would have been responsible for her own tax return 

If she was employed by this business she should have pay slips etc proving that they employed her - did they give her a P45 on leaving

Tell her to contact ACAS for advice as it sounds like she is being treated unfairly

[johnsmeccparts]

It probably has something to do with NI contributions and Tax payments,

self-employed people deal with these themselves

employers have to deal with it for their employees.

It's a long time since I had anything to do with this so it may have changed

but it used to be you couldn't be self-employed if you only work for one person.

[6mark901]

shes phoned the tax office and she hadnt earnt enough to pay tax and  her NI contributions are minimal and nothing to worry about at the moment.

she didnt have a contract

[6mark901]

celtickitty, the verbal agreement was if my daughter left within 2 years she would pay the balance of the training, however she didnt leave she was sacked because she went for another job.( she has kept the text message telling her to drop the keys in and not bother going back )

it was acas that gave her the info on employed / self employed etc yet when they contacted her ex employer about the held back wages her ex employer said " she has no employment rights as she was self employed " and acas didnt put her right on this !!!!

shes spoken to acas today who have basically said it will cost at least £400 to proceed and for £50 is it really worth it

[bankhaunter]

The rules on whether or not a person is selfemployed are actually quite strict, for example could she work the hours she wanted to, could she employ anther person to do the job instead of her.

http://www.hmrc.gov.uk/employment-status/index.htm

If the employer is claiming she is self employed and not paying PAYE and NI stamp when they should be, they could be in bother.

[6mark901]

There is no doubt she was employed and thats what we need to know, what sort of bother her ex employer could be in 🙂

[guardpig]

If the employer told her when to work and where and what to do then she was employed, if she could set her own hours or not go in if it didn't suit her then she could probably be classed as self employed;.  A polite note to HMRC querying her NI contributions and the reason for asking(she should have been paying if self employed) should drop employer right in it.

[guardpig]

Right - classing employees as self employed means no Employers liability on top of public liability. It means saving on the 13% or so Employers NI contribution.  It means no sick pay, no holiday pay(that's about 20% of wage earned on top as a business cost), no redundancy pay, no employment tribunals, no dismissal procedures etc etc etc.  It means no Payroll as such so no software and admin costs.

Oh yes there are advantages.

Now HMRC have been trying for years to stamp out self employment when it isn't self employment......................

The other side is - your workforce has other employers/customers and cannot necessarily be there when you want.  There is no loyalty.  They generally want a higher rate of pay as they have no security and the hassle of sorting their own tax/ni out every year.

Does that make it a little clearer?

[guardpig]

PS - As an employer of longstanding we would write a clause into the contract for any outside training given. However we would never offer outside training to a self employed person - they would be told they'd get more work if they had x,y,z and leave it up to them.  She was employed.  You see they can't just sack her for finding another job so having over-reacted they need her to be self employed..

[6mark901]

thankyou very much for that 🙂    ive searched the fraud section on HMRC  website and couldnt find anything about this. I didnt know if what shes doing is a specific type of fraud.......