UK Hello...and an HMRC procedure query

[Jamesfinancialparaplanner]

Hi all,

My name is James and I wanted to sign up to this board as a friend of mine uses it and recommended it to me as I'm a financial para planner who may be able to help others/network and ask any questions...so hello all, hope you all had a good xmas!

I've been working in financial services for the last two and a bit years now specifically in company advice and high net worth investment/wealth protection advice. All been very interesting, I have been working as a para planner structuring plans whilst getting qualified and so looking to speak to/meet other like minded individuals.

I wanted to ask for some advice to start with as I think I was exploited by a very senior professional who lost his way to greed. I suspect an accountant or someone who knows HMRC very well will be able to help.

So I was working for this company for a year and a half in the same industry. I was advised at my final interview that I could be self-employed to reduce my tax bill but we didn't go into how, given he has been a financial adviser/consultant for 30 years I took his word for it and being 23 at the time just wanted a job in the industry I am interested in.

So the long and short of it is that I now have realised there is no way I could be considered self-employed. I have used the online status tool checker and it was so clear that every question was indicating I should have been employed. I've ran through this on the phone with HMRC and they echo the above.

So, HMRC indicated that given the activity on my account that HMRC shall investigate the situation with my existing employer. He will in my opinion be in big trouble because he's got two other staff in the same position and also advises some questionable tax mitigation schemes which I believe wouldn't stand the test of an HMRC investigation. Also he is a shareholder of a network and if they caught wind of the investigation which I'm sure they would, he would lose pretty much everything as he'd be struck off with the FCA. If you have any questions about the tax planning schemes let me know but seeing as his company is an authorised representative of the network, he will certainly lose his licence and I suspect they won't be very forgiving.

The real question though is do HMRC have a procedure for dealing with these employment status disputes? They've advised on the phone that I should submit the return and they will look into it. Which means I suspect they have decided they will investigate the return. I am in a position where he also advised me that I could claim various expenses which I've now realised I am not entitled to and thus I owe way more to HMRC that I had planned for leaving me in a very vulnerable and difficult position. He has two other staff in the same posiiton and I believe are being exploited.

Any advice would be appreciated.

Look forward to speaking more with all of you.

Best wishes
James

 

[Fidget]

Each case is dealt with on its own merits. There are pointers that suggest employed or self-employed, which you've seen now by the sounds of it and there's some case law around as well, which you've probably seen by now too.

If you're going to be investigated, you'll get written notification of it along with a request to provide whatever info HMRC want from you - although any request should be explicitly related to your tax returns, which may bring about further info requests based on what you've given in response to the original info requests. And so it will go on until you get written notification that the investigation has ended and what the conclusion is.

Best thing to do is comply, and try and do it in writing rather than by phone so that you have it documented.

 

[Jamesfinancialparaplanner]

Thanks Fidget, I feel like the position is very simple but that the employer has ultimately done me over by saying I can claim expenses and now it being clear I can not. HMRC, I suspect won't care about that but just the tax bill being paid but how do I account for the fact that I've planned for several thousands of pounds less in a tax bill....?

I've spoken with lawyers who say well you agreed to be self-employed so it's your responsibility. Ultimately all I did was when advised I could be self-employed went onto the hmrc gov website and looked at the expenses I could claim and planned my financial position accordingly. I then realised I wasn't in a position to claim them and left the firm as I realised I had been exploited. I'm the one who is going to lose several thousand pounds more now regardless of whether he is investigated or not?

Best
James

 

[Fidget]

Solicitors are correct in that HMRC expect the individual/company to be clued up in their own taxation situation and whatever that situation is, HMRC isn't likely to be too sympathetic if it turns out to be wrong - it will just want the tax paid.

How it is paid will be something between you and HMRC. Might be by just reducing your PAYE tax code to reclaim it over the rest of existing tax year, assuming you're employed, or go into the next tax year seeing as there's only 3 months left of this one. Or by another arrangement. Interest might figure in any tax that should've been paid as well until such times as you've paid it. Whatever happens, it will be between you and HMRC over how any tax due is paid.